TSX up after index logs fresh record high close
Investing.com - Wolfe Research has reiterated an Outperform rating on UnitedHealth Group (NYSE:UNH) with a price target of $330.00. The healthcare giant, currently valued at $281.1 billion, trades at a P/E ratio of 13.36, which InvestingPro analysis suggests is attractive relative to its growth potential.
The firm noted that UnitedHealth provided updated 2025 earnings per share (EPS), medical loss ratio (MLR), and long-term margin targets with its second-quarter results. The company’s EPS guidance of at least $16.00 compares to Wolfe Research’s updated estimate of $16.15 and consensus expectations of $16.30. This guidance comes as the company maintains strong revenue growth of 9.7% and a healthy dividend yield of 2.85%.
UnitedHealth’s MLR guidance stands at 89.25%, slightly higher than Wolfe Research’s estimate of 89.10% and the consensus of 89.3%. The company has also lowered its Medicare growth targets from 3-5% to 2-4%, Medicaid from 3% to 2%, and OptumHealth by 2% to 6-8%.
According to Wolfe Research, these revised targets moderate UnitedHealth’s earnings power by approximately 15%, from $30.62 per share to $25.91 based on 2025 revenue estimates. The firm projects 2028/2029 earnings power to be closer to $30 per share. For deeper insights into UnitedHealth’s valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis and 10+ additional ProTips.
Wolfe Research’s unchanged price target of $330 reflects 18.8 times the firm’s 2026 EPS estimate of $17.57, or approximately 13 times earnings power. According to InvestingPro’s Fair Value analysis, UnitedHealth currently appears slightly undervalued, with a "GREAT" overall financial health score of 3.16.
In other recent news, UnitedHealth Group has been under scrutiny as Democratic senators Elizabeth Warren and Ron Wyden have raised concerns about the company’s debt collection practices related to emergency relief loans following a cyberattack in February 2024. In terms of stock ratings, Cantor Fitzgerald has reiterated an Overweight rating for UnitedHealth Group, setting a price target of $440. Meanwhile, Morgan Stanley has lowered its price target to $325, citing "2Q revelations" that indicate a longer turnaround period for the company. Bernstein has also reduced its price target significantly from $594 to $377, anticipating extended performance weakness into 2025 and beyond. On a slightly different note, BofA Securities has increased its price target for UnitedHealth Group to $325 from $290, maintaining a Neutral rating and attributing the adjustment to improved peer multiples. These developments reflect a mix of cautious optimism and concern among analysts regarding UnitedHealth’s future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.