Morgan Stanley analyst Erin Wright reiterated a Buy rating on UnitedHealth (UNH) stock and lifted her price target from $325 to $395, indicating over 11% upside potential. The 5-star analyst raised her price target for UNH stock in reaction to the positive business update provided by the health insurer earlier this week. Wright noted that UNH was the first managed care organization (MCO) under her coverage to disclose expectations for 2026 Medicare Advantage (MA) star ratings with a favorable update.
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Top Analyst Impressed by UNH’s Positive Update
UnitedHealth stock surged earlier this week in reaction to its business update. The company reaffirmed its previously issued full-year adjusted earnings per share (EPS) outlook. UNH added that based on its preliminary review of the initial Centers for Medicare & Medicaid Services (CMS) Medicare Advantage star ratings for star year 2026/payment year 2027, it expects about 78% of its membership in 4-star or higher-rated MA plans.
Reacting to this update, Wright had earlier stated that she is “incrementally positive” about UNH following discussions with management, with conviction in the company’s turnaround, driven by profit improvement in the MA and Optum Health businesses.
In the latest research note, Wright noted that UNH was the first MCO to provide a positive update, followed by Centene (CNC), which indicated an expectation of a modestly better percentage of membership in 4+ star plans.
Wright added that CVS Health (CVS) had a “more balanced approach to Stars commentary.” She noted that CVS remains among the national MA players that have yet to formally release 4+ star membership expectations, along with Humana (HUM) and Elevance Health (ELV).
Is UNH Stock a Buy, Sell, or Hold?
Despite ongoing pressures related to high medical costs in the MA business and federal investigations, Wall Street is bullish on the long-term growth potential of UnitedHealth.
Overall, UnitedHealth stock scores a Strong Buy consensus rating based on 16 Buys, two Holds, and one Sell recommendation. The average UNH stock price target of $324.35 indicates 8.5% possible downside from current levels.
