Oscar Health: Improved Fundamentals and Earnings Outlook Largely Reflected in Fair Valuation, Supporting Neutral/Hold Rating

In a report released today, Jonathan Yong from UBS upgraded Oscar Health to a Hold, with a price target of $17.00.

Jonathan Yong has given his Hold rating due to a combination of factors that balance improving fundamentals with a valuation he sees as largely fair. He notes that individual exchange enrollment appears to be more resilient than initially feared, with industry checks suggesting total marketplace sign-ups could land in the low-20 million range, above prior expectations and supportive of Oscar’s membership base. Oscar’s roughly high‑20s percentage premium increase, while somewhat lower than many managed care peers, is still meaningful and, together with paused program integrity measures embedded in pricing, offers a buffer for margins and earnings. As a result, he now projects a smaller decline in Oscar’s 2026 enrollment and a higher earnings outlook, leading him to raise his price target to $17.

At the same time, Yong stops short of a Buy rating because he believes the current share price already discounts much of this improved outlook. While policy risk around the lapse of enhanced subsidies has shifted from a clear headwind to a potential source of upside if Congress passes some form of extension or reform, this remains uncertain and not central to his base case. His updated valuation uses a higher earnings multiple more aligned with select managed care peers, reflecting better enrollment trends and pricing power, but still implies limited near‑term upside from current levels. Taken together, these factors lead him to view the stock as appropriately valued for now, justifying a Neutral/Hold stance rather than a more aggressive recommendation.

In another report released on January 5, Barclays also upgraded the stock to a Hold with a $18.00 price target.