The hits have been swift and painful for UnitedHealth Group (NYSE:UNH) this year, and the once mighty, dependable blue chip has seen its share price fall almost 60% since its mid-April earnings earthquake.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The company has admitted its missteps, with CEO Stephen Hemsley acknowledging that UNH underestimated medical costs for 2025 by some $6.5 billion. Though the company remains profitable, its margins are shrinking, and fell by some 19% year-over-year in Q2 2025.
Can the company right the ship and ascend back to the ranks of perennial winners? One top investor known by the pseudonym The Asian Investor sure thinks so.
“Despite risks from rising medical costs, I believe the market overreacted and UNH downside is limited if UnitedHealth stabilizes margins,” explains the 5-star investor, who is among the top 2% of TipRanks’ stock pros.
The Asian Investor spots a number of catalysts which could trigger a turnaround. For starters, UNH’s use of AI via its Optum efforts to deliver better outcomes for its patients could help optimize treatments, lead to savings, and improve the sinking margins.
On the other side of the ledger, the investor predicts that UNH will be able to raise premiums, which would also decrease the margin pressures hampering the company.
Of course, the plus side of falling valuations is a significantly cheaper share price, one that The Asian Investor points out is much lower than the company’s historical average. Indeed, with a Forward 2026 Price-to-Earnings multiple of 11.9x, UNH is trading at close to a 50% discount to its longer-term average.
In addition, UNH’s “core profitability” should help to shield investors additional big-time losses. Assuming the company can address the negative cost trends, concludes The Asian Investor, this is one to latch onto.
“UnitedHealth is in a contrarian setup that could potentially yield attractive returns for investors buying the drop,” sums up The Asian Investor, who is rating UNH a Strong Buy. (To watch The Asian Investor’s track record, click here)
Wall Street is also content to stick around, believing better days are ahead. With 18 Buys, 3 Holds, and 2 Sells, UNH is a consensus Moderate Buy. Its 12-month average price target of $318.00 has an upside north of 30%. (See UNH stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.