Morgan Stanley ‘incrementally positive’ following UnitedHealth discussions

Morgan Stanley is incrementally positive following discussions with UnitedHealth (UNH) management, where the company had conviction in the turnaround, driven by Optum Health and Medicare Advantage profit improvement, the analyst tells investors in a research note. The firm, which has an Overweight rating and $325 price target on the shares, walked away from the discussions incrementally constructive as management laid out four areas in Optum Health it is working to address and feels the long-term target margins likely being achievable in 2028 with the ramp-up being back-end loaded as the opportunity is primarily being driven by Optum Health operational improvements and benefiting from the pressure the current MA environment places on others in the ecosystem to seek out strong value-based care solutions.