2027 rate notice likely pushing UnitedHealth lower, says BofA

BofA notes that UnitedHealth’s (UNH) Q4 EPS and 2026 guidance were both in line with consensus and contends that they show the turn around is “on track.” The firm views the $17.75 EPS guidance as a floor for 2026 and expects modest beats and raises through the year as UnitedHealth continues to execute its turn around, the analyst added. However, CMS issued its 2027 Advance Rate Notice last night, which was well below what the market was expecting, and some “V29” type risk adjustment changes clouds how quickly Medicare Advantage and Value Based Care can rebound, adds the analyst, calling this “the main driver of the down move today.” BofA maintains a Neutral rating and $360 price target on UnitedHealth shares as waits for further visibility on “V29” in 2027 and beyond.