UnitedHealth stock holds Buy rating at UBS amid Medicare Advantage strategy

Investing.com - UBS maintained its Buy rating and $330.00 price target on UnitedHealth Group (NYSE:UNH), currently trading at $260.17, as the healthcare giant navigates Medicare Advantage challenges. According to InvestingPro data, the stock is trading near its 52-week low, with analysts maintaining a bullish consensus despite recent headwinds.

UnitedHealth is projecting approximately 10% cost trend assumptions for Medicare Advantage in 2026, with about 7.5% related to current trends continuing into next year, according to UBS analyst notes.

The company expects to achieve 50 basis points of Medicare Advantage margin expansion in 2026 through planned initiatives including strategic market exits that will impact approximately 600,000 current members, one-third of whom are in markets UnitedHealth plans to exit completely.

UnitedHealth is also considering exits for its OptumHealth business in 2026, though specific details were not provided in the analyst commentary.

The company has not yet provided Medicare Advantage membership growth projections for next year, preferring to wait until competitors position their products, but management emphasized its primary focus remains on margin recovery for 2026.

In other recent news, UnitedHealth Group’s second-quarter earnings call for 2025 revealed a mixed financial performance. The company reported earnings per share (EPS) of $4.08, which was below the expected $4.45, representing an 8.31% miss. However, UnitedHealth saw a 13% increase in revenue year-over-year, reaching $112 billion. Several analysts have adjusted their outlook on the company following these developments. Oppenheimer lowered its price target for UnitedHealth to $325, maintaining an Outperform rating, while Piper Sandler also reduced its target to $317, citing insights from the earnings call. Mizuho (NYSE:MFG) maintained its Outperform rating with a $350 price target, noting ongoing pricing pressures and challenges in the Medicaid business. Meanwhile, BofA Securities decreased its price target to $300, reflecting expectations of a slower recovery. These recent developments indicate varied analyst perspectives on UnitedHealth’s financial trajectory.

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