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Elevance Health (ELV) Enhances Whole Health With Paragon Buyout

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Elevance Health, Inc. (ELV - Free Report) recently announced that it has signed an agreement to acquire Paragon Healthcare, boosting its suite of whole health services. Paragon Health specializes in providing life-giving and life-saving injectable and infusible therapies. This transaction is expected to close by the first half of 2024, subject to closing conditions.

This move bodes well for Elevance Health as providing low-cost specialty medications and services for members suffering from complex and chronic illnesses will enhance its value proposition. Elevance Health can diminish barriers to care by offering services at in-home as well as ambulatory locations. Moreover, Paragon’s addition is expected to drive Carelon, ELV’s health services segment’s revenues.

An enhanced product suite and improved membership levels due to expansion should position the company well for growth. We expect Carelon’s revenues to rise 13.7% year over year in 2023. Elevance Health brings continued improvements in its offerings to healthcare providers and members. ELV is aiming to expand Paragon’s geographical presence after the acquisition. It will also not shy away from improving its therapeutic coverage and enhancing customer service.

Paragon Health’s customers will benefit from ELV’s whole health insights built from pharmacy and medical data. Paragon Health will function as part of CarelonRx, ELV’s pharmacy services unit, post-acquisition. Product innovations, geographical expansions and inorganic growth initiatives should position the company to achieve its long-term adjusted earnings per share growth of 12-15%. Elevance Health will remain focused on providing a simpler, affordable and accessible healthcare experience for its customers.

Price Performance

Elevance Health’s shares gained 10.4% in the past six months compared with the 0.9% rise of the industry.

Zacks Investment Research
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Zacks Rank & Key Picks

Elevance Health currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Medical space are Atai Life Sciences N.V. (ATAI - Free Report) , Biodesix, Inc. (BDSX - Free Report) and Cencora, Inc. (COR - Free Report) . Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Atai Life Sciences’ current-year earnings implies a 68.4% improvement from the year-ago reported figure. It has witnessed four upward estimate revisions over the past 60 days against no movement in the opposite direction. ATAI beat earnings estimates in two of the last four quarters, met once and missed on one occasion.

The Zacks Consensus Estimate for Biodesix’s 2023 earnings indicates a 52.9% year-over-year increase. It has witnessed two upward estimate revisions over the past 60 days against no movement in the opposite direction. The consensus mark for BDSX’s 2023 revenues indicates 31.3% growth from a year ago. BDSX beat earnings estimates in three of the last four quarters and missed on one occasion.

The Zacks Consensus Estimate for Cencora’s fiscal 2024 bottom line is pegged at $12.88 per share, which rose 0.5% in the past 60 days. During this time, COR has witnessed five upward estimate revisions against none in the opposite direction. It beat earnings estimates in all the last four quarters, with the average surprise being 3.9%.

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