UnitedHealth Downgraded to ‘Reduce’ Amid Leadership Challenges and Policy Risks

In a report released today, Sidharth Sahoo from HSBC downgraded UnitedHealth (UNH – Research Report) to a Sell, with a price target of $270.00.

Sidharth Sahoo has given his Sell rating due to a combination of factors impacting UnitedHealth’s future performance. The company has experienced significant challenges, including a leadership change and allegations of Medicare fraud, which have contributed to a substantial decrease in its market capitalization. The new CEO faces the task of addressing these issues, but there are concerns about the company’s ability to maintain earnings growth amidst policy uncertainties.
Sidharth Sahoo highlights several risks that could hinder UnitedHealth’s recovery. These include potential increases in the medical loss ratio, policy risks related to Optum Rx, and lower return on equity expectations. Additionally, the cancellation of 2025 earnings guidance has increased the downside risk for future earnings, and potential Medicaid funding cuts could further impact the company’s financial performance. As a result, Sidharth Sahoo has downgraded the stock to a ‘Reduce’ rating, reflecting the unfavorable risk-reward balance at this time.

Based on the recent corporate insider activity of 146 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of UNH in relation to earlier this year.