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Investing.com - Bernstein raised its price target on UnitedHealth Group (NYSE:UNH) to $440.00 from $433.00 on Thursday, while maintaining an Outperform rating on the healthcare giant’s stock. This target aligns with the high end of analyst expectations for UNH, which currently trades at a P/E ratio of 19.14 and has seen its shares decline 28.52% year-to-date.
The investment firm cited evidence that "pricing discipline is being restored" in Medicare Advantage and Optum Health divisions, which it believes will lead to faster margin recovery despite short-term growth constraints. InvestingPro data shows UNH maintains a strong free cash flow yield of 8%, supporting its capacity to navigate these short-term challenges.
Bernstein expects a sector-wide turnaround as Medicare Advantage and Medicaid recover from what it describes as "trough margins" following rate shocks, competitive withdrawals, and redeterminations.
The firm views UnitedHealth’s valuation as attractive given expectations for "outsized EPS growth recovery over the next 4 years" as the company rebuilds its long-term earnings growth engine.
Longer term, Bernstein highlighted UnitedHealth’s position as the leading value-based care player and noted Optum Insight’s potential to become a significant seller of AI solutions for care delivery efficiencies to providers and hospitals.
In other recent news, UnitedHealth Group’s third-quarter performance has caught the attention of several analyst firms, leading to adjustments in stock price targets and reaffirmations of ratings. RBC Capital raised its price target for UnitedHealth Group to $408 from $286, maintaining an Outperform rating, citing industry multiple expansion. KeyBanc reiterated its Overweight rating with a $400 price target, highlighting the company’s better-than-expected medical loss ratio of 89.9%. Leerink Partners also increased its price target to $410 from $402, maintaining an Outperform rating and noting the company’s stable cost trends and effective execution against targets.
Truist Securities maintained a Buy rating with a $410 target, impressed by UnitedHealth’s strong third-quarter results, which surpassed expectations and led to an upward revision of the company’s full-year 2025 guidance. Piper Sandler adjusted its price target to $417 from $423, keeping an Overweight rating and describing the quarter as a "beat and raise" despite the slight target reduction. These developments underscore the positive sentiment among analysts regarding UnitedHealth Group’s recent financial performance and future prospects.
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