UnitedHealth (UNH) stock has fallen about 37% so far in 2025 but has begun to recover, rising 4% over the past three months. Adding to the momentum, the health insurer won back investor confidence after giving an upbeat update on its Medicare Star Ratings. Following discussions with UnitedHealth’s management, Morgan Stanley analyst Erin Wright reiterated an Overweight rating and a $325 price target, saying she came away more confident in the company’s turnaround story.
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It is worth noting that Wright ranks 274 out of more than 10,018 analysts tracked by TipRanks. She has a success rate of 64%, with an average return per rating of 13.10% over a one-year timeframe.
Why Wright Is Positive on UnitedHealth
Wright said management showed strong conviction in profit recovery, led by improvements in both Medicare Advantage (MA) and Optum Health. She expects MA margins to move higher, with pre-tax margins rising from 2.0–2.5% in 2025 to 2.5–3.0% in 2026, and potentially reaching the top of the 2–4% range by 2027.
The analyst also addressed the company’s plan exits, which will affect about 600,000 members. Management expects fewer of these members to remain with the company than in past years. While that means lower retention, Wright sees it as a positive because it allows UnitedHealth to focus on more profitable plans, helping margins improve in 2026.
Another encouraging sign is the outlook for Medicare Star Ratings. She noted that about 78% of MA members could be in 4-star or higher plans in 2026, up from 71% this year, giving the company better visibility on profit recovery.
Looking further ahead, Wright believes UnitedHealth can reach 6–8% pre-tax margins by 2028, supported by stronger performance at Optum Health and continued growth in value-based care.
Is UNH Stock a Buy, Hold, or Sell?
Wall Street has a Strong Buy consensus rating on UnitedHealth stock based on 17 Buys, two Holds, and one Sell recommendation. At $322.28, the average UnitedHealth stock price target implies a 7.37% downside potential.
