UnitedHealth downgraded to Hold from Buy at HSBC

HSBC downgraded UnitedHealth (UNH) to Hold from Buy with a price target of $490, down from $600. The firm says it and the company “massively underestimated” cost trends that resulted in UnitedHealth’s 12% cut to 2025 earnings guidance. There is little room for earnings upgrades in 2025 in the absence of acquisitions, but the 2026 Medicare Advantage rate update is the “silver lining,” the analyst tells investors in a research note. HSBC says the risk of inflation in both hospital and part D prescription drugs to persist for longer has increased amid the tariff war. As such, the firm sees a balanced risk/reward for shares of UnitedHealth after the selloff.