UnitedHealth (UNH) stock has plunged 40% year-to-date due to multiple reasons, including the U.S. Department of Justice’s (DOJ) investigation into the company’s Medicare billing practices and disappointing financials due to higher medical costs, mainly related to Medicare Advantage plans. Despite the ongoing pressures, most analysts remain bullish on UNH stock and patiently await a turnaround in the health insurer’s business.
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Meanwhile, the latest unfavorable news on UNH is that the DOJ probe extends beyond the possible Medicare fraud. According to a Bloomberg report, the regulatory agency is investigating UNH’s pharmacy benefit manager, Optum Rx, and its reimbursement practices for its own doctors.
Top Analysts Remain Bullish on UNH Stock
Following the Q2 earnings miss, Morgan Stanley analyst Erin Wright lowered the price target for UnitedHealth stock to $325 from $342 to reflect a more prolonged turnaround story. That said, the 5-star analyst reiterated a Buy rating on UNH stock, saying “our illustrative bridge to 2027 EPS points to potential upside to Street estimates, as the recovery plays out.” Wright’s optimism about 2027 earnings is based on expectations of accelerated margin improvement across businesses.
Notably, Wright expects a steeper recovery beyond 2026, though the analyst cautioned that the road to recovery is not entirely clear, with still a lot to prove in terms of execution, particularly across Optum Health, where she expects a multi-year turnaround.
Additionally, Mizuho analyst Ann Hynes slashed her price target for UNH stock to $300 from $350 but maintained a Buy rating. The analyst noted the underperformance in Optum Health’s value-based care and Optum Insight segments. Moreover, Hynes expects the pricing pressure and increased medical cost trends to persist in 2026. Nonetheless, the 5-star analyst remains bullish on UnitedHealth due to its scale, market position, and diversified business. Given the steep pullback in UNH stock, Hynes finds valuation attractive at current levels.
Aside from Wall Street analysts, Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) and other hedge funds, including David Tepper’s Appaloosa Management, are also optimistic about UNH’s long-term growth potential and recently revealed their stakes in the troubled health insurer.
Is UNH Stock a Buy, Sell, or Hold?
Currently, Wall Street has a Strong Buy consensus rating on UnitedHealth stock based on 17 Buys, two Holds, and one Sell recommendation. The average UNH stock price target of $314.95 indicates 3.6% upside potential from current levels.
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