Baird downgrades UnitedHealth on difficult Medicare Advantage path forward

As previously reported, Baird downgraded UnitedHealth (UNH) to Neutral from Outperform with a price target of $312, down from $356. The path forward in mitigating the current Medicare Advantage risk-adjustment model, v28, “appears much more difficult than we previously expected,” the analyst tells investors. The firm’s due diligence “cast enough doubt on OptumHealth to give us pause on the long-term story,” says the analyst, who questions whether UnitedHealth has “the necessary level of margin offsets heading into year three of v28 phase-in.”