Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Wednesday, TD Cowen reiterated its Hold rating on UnitedHealth Group (NYSE:UNH) shares, maintaining a price target of $308.00. The reaffirmation of the rating follows a recent downgrade on May 19th, when the firm adjusted its stance on the healthcare giant to Hold. For investors seeking deeper insights into the healthcare sector, InvestingPro analysis reveals that competitor Humana shows strong financial health with a GOOD overall score, suggesting resilience in this challenging market environment.
The decision by TD Cowen comes in the wake of a report by The Guardian, alleging that UnitedHealth Group had been secretly paying nursing homes bonuses to reduce hospital transfers of residents, aiming to cut care expenses for those covered by UNH through I-SNP plans. UnitedHealth Group has refuted the allegations, stating that the whistleblower cited in the article does not possess the necessary data or expertise to evaluate the company’s programs.
TD Cowen sees the report as adding to the current uncertainty surrounding UnitedHealth Group. The firm’s previous downgrade to Hold was primarily based on the expected impact of the v28 risk model in 2025 and 2026, as well as increasing utilization patterns. Additional reporting by The Wall Street Journal was also mentioned as a factor contributing to the heightened uncertainty.
Institutional Special Needs Plans (I-SNPs) are a focal point in the healthcare market, catering to Medicare Advantage beneficiaries who require long-term care. These plans generally generate higher revenue per member per month (PMPM) due to the medical complexity of the beneficiaries. The average PMPM revenue for the I-SNP market is estimated to be around $3,400, significantly higher than that of duals at $2,100 and individual non-SNP plans at $1,200.
As of May 2025, UnitedHealth Group holds approximately 49% of the I-SNP market share, with around 60,000 members. This is a substantial lead over other public companies, with Humana (HUM) and Elevance Health (ELV) each having about 3,000 I-SNP members, and CVS Health (NYSE:CVS) having around 2,000. According to InvestingPro data, Humana has demonstrated resilience with $120.26 billion in revenue over the last twelve months and a solid 10.09% revenue growth. The company maintains a healthy current ratio of 1.91 and has recently shown momentum with a significant 10.78% return over the past week. Get access to comprehensive analysis and 8 additional ProTips for Humana through InvestingPro’s detailed research reports, part of its coverage of 1,400+ US stocks. The total I-SNP market, based on the latest public data from 2023, has an average risk score of 2.59, in contrast to 1.55 for duals and 1.03 for individual non-SNP plans.
In other recent news, UnitedHealth Group has announced a leadership change with CEO Andrew Witty stepping down for personal reasons, and former CEO Stephen Hemsley taking over. The company has also withdrawn its 2025 guidance due to accelerating trends in Medicare Advantage (MA) and higher medical costs among new MA members. Despite this, UnitedHealth anticipates a return to growth by 2026. Meanwhile, SelectQuote is facing legal challenges as the United States has filed a False Claims Act complaint against the company and others for allegedly accepting illegal kickbacks related to Medicare Advantage enrollments. This legal action is being closely monitored by investors due to potential financial penalties.
Humana Inc (NYSE:HUM). recently received an upgrade from Raymond (NSE:RYMD) James, which raised its stock rating to Outperform and set a price target of $315. This follows Humana’s first-quarter 2025 results, where the company reported an adjusted earnings per share (EPS) of $11.58, surpassing expectations. Although revenue slightly missed projections at $32.11 billion, the company maintained its full-year EPS guidance of approximately $16.25. The positive performance was attributed to factors such as a favorable drug mix and operational efficiencies. Raymond James noted that Humana’s Medicare Advantage costs are aligning with expectations, suggesting stable performance relative to industry peers.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.