Shares of UnitedHealth Group (UNH) are down more than 36% year-to-date, despite the health insurer reporting better-than-expected third-quarter results and raising its full-year earnings guidance. Investors remain concerned about high medical costs, especially in the company’s Medicare Advantage (MA) business, and the ongoing Department of Justice (DOJ) investigation. While most Wall Street analysts agree there are short-term pressures, they remain bullish on UNH stock, citing the company’s turnaround efforts, margin recovery, and long-term growth potential.
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Analysts Stay Bullish on UnitedHealth Stock
UnitedHealth raised its 2025 adjusted earnings per share (EPS) outlook to at least $16.25, slightly up from its previous forecast of at least $16.00. The company is confident about delivering improved performance in 2026, as turnaround efforts gain steam under CEO Stephen Hemsley. Notably, Hemsley returned as UNH’s CEO in May, after heading the company from 2006 to 2017, to help regain investor confidence.
UNH and its peers have been struggling due to steep costs. In Q3 2025, UNH’s medical loss ratio (which indicates the percentage of premiums spent on medical care) was 89.9%, in line with the company’s forecast and the Street’s estimate of 89.87%. It is worth noting that health insurers generally target a ratio closer to 80%.
Following the Q3 results, Piper Sandler analyst Jessica Tassan slightly lowered her price target for UnitedHealth stock to $417 from $423 and reiterated a Buy rating. The revised price target is based on a valuation multiple of 20x 2027 adjusted EPS. The analyst stated that she remains a buyer of UNH stock following the strong third-quarter results and raised guidance. Tassan added that UNH’s strong execution gives her confidence that the company’s earnings can grow faster over the next two years. She also noted UNH’s efforts to improve the Optum Health business.
“CEO Steve Hemsley is transforming a confederation of providers into a national physician network to improve culture, clinical outcomes, and costs at scale,” said Tassan.
Meanwhile, RBC Capital analyst Ben Hendrix increased the price target for UnitedHealth stock to $408 from $286 to reflect expansion in the industry multiple and reiterated a Buy rating. The 4-star analyst noted that management expects strong pricing and MA plan exits to drive margin improvement in 2026. The company recently announced that it will exit more than 100 MA plans. Given expectations of margin improvement accelerating in 2027, Hendrix expects UNH’s EPS to grow near the low end of its long-term annual growth target of 13% to 16%.
Is UNH a Good Stock to Buy?
Despite near-term challenges, Wall Street has a Strong Buy consensus rating on UnitedHealth stock based on 17 Buys, three Holds, and one Sell recommendation. The average UNH stock price target of $395.67 indicates about 23% upside potential. UNH stock offers a dividend yield of 2.7%.
