UnitedHealth (UNH) stock plunged about 20% on Tuesday as the health insurer issued a soft revenue outlook for 2026. Also, investors reacted negatively to the Centers for Medicare and Medicaid Services (CMS) proposal to increase the Medicare Advantage (MA) payment rates by 0.09% in 2027, well below the expectation of 5%. Given these updates, TD Cowen analyst Ryan Langston lowered his price target for UNH stock to $311 from $338. The analyst, who is sidelined on UnitedHealth stock, lowered his 2027 estimates, citing a “worse-than-anticipated” Medicare Advance Notice.
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TD Cowen Analyst Is Cautious on UnitedHealth Stock
Langston raised his 2026 earnings per share (EPS) estimate to $17.53 from $17.27, but lowered his 2027 EPS forecast to $19.44 from $19.95. The analyst explained that his estimates reflect the 2026 guidance, including improving margins in the Commercial and Medicare segments and further weakness in Medicaid margins.
Additionally, Langston’s 2027 estimates reflect the worse-than-expected MA rate in the Advance Notice and assume a Medicare Advantage per-member-per-month rate of +4% from improvement in the Final Notice. Notably, Langston expects about a 200 basis points of rate improvement from the Advance Notice, better coding, and Part D dynamics. The analyst highlighted that his revised price target for UNH stock reflects a 16x price-to-earnings (P/E) multiple based on 2027 earnings.
Unlike Langston, most analysts remain bullish on UnitedHealth stock. For instance, KeyBanc analyst Matthew Gillmor reiterated a Buy rating on UNH stock with a price target of $400. Gillmor noted that Q4 2025 results reflected continued improvement, supported by a better-than-expected medical loss ratio (91.5% vs. 92.1%) and an in-line 2026 guidance. The analyst added that the steep pullback in UNH stock was due to the weak initial MA rate proposal for 2027, which raised concerns about future margins and earnings growth. Despite this, the analyst believes that UNH stock’s valuation is now highly discounted, trading well below historical valuation levels, and expects final 2027 MA rates to improve enough for insurers to at least hold margins steady.
Is UNH Stock a Strong Buy?
With 16 Buys and two Holds, Wall Street has a Strong Buy consensus rating on UnitedHealth stock. The average UNH stock price target of $386.75 indicates 32.3% upside potential.
