‘Time to Exit,’ as Another Analyst Loses Faith in UnitedHealth Stock (UNH)

Analysts continue to lose confidence in UnitedHealth Group (UNH). Recently, an HSBC (HSBC) analyst, Sidharth Sahoo, downgraded the rating on UNH stock to Sell from Hold, and reduced the price target to $270 (16% downside potential) from $490. The move reflects growing concerns about the company’s prospects.

The rating cut comes as UnitedHealth faced major setbacks over the past week, including a CEO shakeup, a withdrawn financial outlook, and stock hitting a five-year low. Following this, several analysts slashed UNH’s price targets, with some also downgrading their ratings.

Why did the Analyst Downgrade UNH Stock’s Rating?

While some investors see UnitedHealth’s 30% discount to historical P/E as a buying opportunity, Sahoo points to three major red flags that could delay a recovery. According to the analyst, 2025 estimates now show a medical loss ratio (MLR) of 88.1%, exceeding the company’s previous guidance of 87-88%. This raises concerns about higher healthcare costs extending into 2026 and impacting profits.

Also, legislative uncertainties about pharmacy benefit managers (PBMs) and the potential introduction of a most-favored nation (MFN) drug pricing model could impact Optum’s revenue streams. The analyst noted that these risks are not fully priced in.

Lastly, with weaker earnings forecasts and macro uncertainties, Sahoo believes UNH’s valuation should be lower.

Analyst Flags Earnings Uncertainty  

Also, Sahoo noted that earnings uncertainty has increased after UnitedHealth withdrew its 2025 guidance. He believes this will give the new CEO an opportunity for “kitchen sinking”, a strategy where leadership takes all potential financial hits at once to reset expectations.

Further, he expects recovery could be delayed into 2026-27, especially as Medicaid funding cuts hurt profitability in Medicare Advantage.

Is UNH a Good Buy Right Now?

Turning to Wall Street, UNH stock has a Strong Buy consensus rating based on 19 Buys and seven Holds assigned in the last three months. At $390, the average UnitedHealth stock price target implies a 21.28% upside potential.

See more UNH analyst ratings