UnitedHealth (UNH) stock has declined 35% year-to-date amid several challenges, including high medical costs and a Department of Justice (DOJ) investigation into its Medicare billing practices. Despite these headwinds, most Wall Street analysts remain bullish on UNH stock and are confident about the company’s turnaround and its long-term growth prospects.
TipRanks Black Friday Sale
- Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Interestingly, Berkshire Hathaway (BRK.B) bought over 5 million UnitedHealth shares, worth about $1.6 billion, reflecting billionaire investor Warren Buffett’s confidence in the stock.
Analysts Are Confident About UNH’s Turnaround Story
Several analysts reacted positively to UnitedHealth’s better-than-expected Q3 results and the upgrade to the full-year earnings outlook. For instance, Bernstein analyst Lance Wilkes increased the price target for UNH stock to $440 from $433 and reiterated a Buy rating. Wilkes expects a sector-wide turnaround as Medicare Advantage (MA) and Medicaid recover from weak margins following MA rate shocks, less competition, and the redetermination process. Wilkes finds UNH stock’s valuation attractive, as he expects a notable recovery in EPS growth over the next four years.
In the medium term, Wilkes expects earnings to improve as MA recovers and the company brings back stronger pricing discipline. This should help improve margins for both MA and Optum Health. Over the long term, Wilkes prefers exposure to this leading value-based care (VBC) company, as he expects VBC to become more important across all products due to elevated medical costs.
Meanwhile, RBC Capital analyst Ben Hendrix raised his price target for UNH stock to $408 from $286 to reflect expansion in the industry multiple and reiterated a Buy rating. The analyst highlighted the company’s optimism about improvement in 2026 margins, driven by strong pricing and the MA plan exits. UNH recently announced that it will exit more than 100 MA plans. Given expectations of margin improvement ramping in 2027, Hendrix projects UNH’s EPS growth near the low end of the long-term annual target of 13% to 16%.
Is UNH a Good Stock to Buy?
Currently, 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 $393.95 indicates 19.5% upside potential.
