Street Calls of the Week
Investing.com - Piper Sandler raised its price target on UnitedHealth Group (NYSE:UNH) to $423.00 from $280.00 on Friday, while maintaining an Overweight rating on the healthcare giant’s stock. The company, currently valued at $326.45 billion, has demonstrated strong financial performance with a 9.7% revenue growth over the last twelve months. According to InvestingPro, UnitedHealth maintains a GREAT overall financial health score of 3.1.
The research firm updated its UnitedHealthcare margin projections based on improved visibility into the earnings power of UNH’s insurance segment. Piper Sandler’s analysis relied on statutory filings, SEC documents, and company commentary to estimate historical medical loss ratios and operating margins by line of business. The company trades at an attractive P/E ratio of 15.58 and offers a dividend yield of 2.48%, having maintained dividend payments for 33 consecutive years.
UnitedHealth had proactively lowered its calendar year 2025 earnings guidance and provided a preliminary 2026 framework during its second-quarter earnings call in July, citing trend pressures across its Medicare, Commercial, and Medicaid businesses.
Piper Sandler believes UnitedHealth made "adequate accommodations for adversity" in both its reduced 2025 guidance and preliminary 2026 framework. The firm noted that third-quarter 2025 reports from industry peers depict a trend, pricing, and policy environment that UnitedHealth appears to have anticipated.
The investment bank expects UnitedHealth to execute against its outstanding guidance, deliver $16.25 of adjusted earnings per share this year, and return to a double-digit earnings compound annual growth rate after what it considers a 2025 trough. For deeper insights into UNH’s valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis and additional ProTips in the detailed Pro Research Report.
In other recent news, UnitedHealth Group has been actively engaging in various developments. The company is reportedly testing a new AI system, Optum Real, aimed at streamlining medical claims processing by converting complex health plan rules into real-time, actionable information. This initiative represents an early application of artificial intelligence in healthcare billing. Additionally, the Chief Financial Officer of UnitedHealth’s Optum unit, Roger Connor, has stepped down after less than six months, returning to the United Kingdom, according to an internal memo. Meanwhile, Blackstone is among the private equity firms considering offers for UnitedHealth’s Optum UK operation. Analyst firms have also been adjusting their outlook on UnitedHealth. Jefferies has raised its price target for the company to $409, maintaining a Buy rating, citing potential margin improvements in Medicare Advantage by 2026. Similarly, TD Cowen increased its price target to $335, with a Hold rating, based on an optimistic outlook for Medicare Advantage margins in 2027 and beyond. These recent developments reflect the ongoing strategic and financial shifts within UnitedHealth Group.
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