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On Monday, Truist Securities adjusted its outlook on UnitedHealth Group (NYSE:UNH) shares, reducing the price target to $580 from the previous $660, while reiterating a Buy rating on the stock. The adjustment comes as UNH shares have declined over 22% in the past week, now trading near $454, according to InvestingPro data. The revision follows UnitedHealth Group’s guidance update for the year 2025, which reflected unexpected member profile changes within its Optum Health segment and increased Medicare Advantage (MA) care activity.
The Truist analyst expressed continued confidence in UnitedHealth Group’s prospects despite the lowered guidance. With an overall Financial Health Score of "GREAT" from InvestingPro, and a 33-year track record of consistent dividend payments, the company maintains strong fundamentals. The analyst noted that while the revised forecast related to Optum Health and heightened MA care activity was a letdown, there are measures underway to address the member profile changes. The analyst also pointed out that the emergence of MA trends early in the year, along with a better than expected final rate, should provide the company with more flexibility moving into 2026.
UnitedHealth Group’s performance in other areas was also highlighted, with Commercial and Medicaid care activity reported as being on target. The narrowing gap between Medicaid rates and acuity was seen as a positive sign, and the commentary on the selling season was described as upbeat, indicating a strong market position.
The analyst emphasized the company’s solid cash flow and financial flexibility as key strengths. Trading at a P/E ratio of 19.06 and demonstrating strong profitability with an 8% revenue growth over the last twelve months, UnitedHealth appears undervalued according to InvestingPro Fair Value analysis. Despite the reduction in the price target, the analyst’s outlook remains optimistic, with expectations that UnitedHealth Group will take effective steps to manage the challenges it faces and continue to perform well financially. The revised estimates and price target reflect a cautious but still positive view of the company’s future performance. Investors seeking deeper insights can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers UNH among 1,400+ top US stocks.
In other recent news, UnitedHealth Group has reported its first-quarter 2025 earnings, which fell short of expectations. The company posted an earnings per share (EPS) of $7.20, missing the forecasted $7.29, and reported revenue of $109.6 billion, below the anticipated $111.5 billion. These results have led to a downward revision of UnitedHealth’s 2025 EPS outlook to a range of $26.00 to $26.50, from the previous forecast of $29.50 to $30.00. Raymond (NSE:RYMD) James, in response, has adjusted its price target for UnitedHealth shares from $635.00 to $540.00 while maintaining a "Strong Buy" rating. The earnings miss was attributed to challenges in the Medicare Advantage risk segment within the Optum Health division, primarily due to higher utilization levels and lower risk scores from new members. Despite these challenges, OptumRx revenues grew by 14%, surpassing $35 billion for the quarter. UnitedHealth’s focus remains on cost containment and innovation in healthcare delivery, as the company aims to address ongoing challenges in the Medicare Advantage market.
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