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On Wednesday, Cantor Fitzgerald reiterated its Overweight rating on UnitedHealth Group (NYSE:UNH) shares, maintaining a price target of $440.00. The firm’s analyst, Sarah James, provided insights into the rationale behind the sustained positive outlook on the healthcare giant. With the stock currently trading at $321.46, down over 20% in the past week and near its 52-week low of $309.10, InvestingPro data suggests the stock is in oversold territory. James highlighted UnitedHealth’s diverse portfolio as a strong point, particularly in the context of the upcoming election cycle. The assessment is that the company is well-positioned to capitalize on the rapidly expanding government insurance market due to its scale and analytical capabilities.
The price target set by Cantor Fitzgerald is based on a 16.5 times price-to-earnings (P/E) multiple applied to the projected 2026 earnings per share (EPS) of $26.65. Currently trading at a P/E ratio of 12.91x, InvestingPro analysis indicates the stock is trading below its Fair Value, suggesting potential upside opportunity. This valuation reflects a 14% discount to UnitedHealth’s five-year historical average P/E ratio. Additionally, it represents a 23% premium over the broader peer group average and a 31% premium relative to the average of UnitedHealth’s most direct competitors. The firm’s analyst believes that UnitedHealth’s product innovation could foster a beneficial scenario in the potentially challenging commercial market.
Despite the positive outlook, James also outlined potential risks that could impact the price target for UnitedHealth shares. These risks include the possibility of commercial risk spread compression in 2025 and a shift from Administrative Services Only (ASO) to commercial risk. Further concerns involve a House investigation into the potentially anti-competitive nature of the Pharmacy Benefit Manager (PBM) industry concentration. Additionally, a challenging rate environment and market-specific irrational pricing by peers were cited as potential headwinds. InvestingPro subscribers can access over a dozen additional risk factors and company-specific insights through the comprehensive Pro Research Report.
UnitedHealth Group is a diversified health and well-being company dedicated to helping people live healthier lives. The company has maintained dividend payments for 33 consecutive years and has raised its dividend for 15 straight years, demonstrating strong financial stability. It offers a broad spectrum of products and services through two distinct platforms: UnitedHealthcare, which provides healthcare coverage and benefits services, and Optum, which provides information
In other recent news, UnitedHealth Group has been the focus of several analyst updates and strategic changes. The company announced a leadership change with Stephen Hemsley returning as CEO, following Andrew Witty’s departure. This shift coincided with the suspension of UnitedHealth’s 2025 financial guidance, which has led to adjustments in stock ratings and price targets from several financial firms. Raymond (NSE:RYMD) James downgraded the stock to Market Perform, citing concerns over the company’s future visibility and lowered its earnings per share estimates for 2025 and 2026.
Meanwhile, KeyBanc reduced its price target to $450 but maintained an Overweight rating, expressing optimism for a recovery by 2026 despite current challenges. Jefferies also lowered its price target to $400, while keeping a Buy rating, pointing to issues in the Medicare Advantage segment as a concern. Truist Securities maintained a Buy rating with a $580 price target, noting the company’s strong balance sheet and cash flow as buffers against near-term risks. Piper Sandler reiterated an Overweight rating with a $552 target, expressing confidence in Hemsley’s leadership to navigate the company through its current challenges.
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