KeyBanc has revised its price target for UnitedHealth Group (UNH, Financial), lowering it from $650 to $575 while maintaining an Overweight rating. The adjustment follows a disappointing first-quarter update from UnitedHealth, where challenges in the Medicare Advantage segment were highlighted as significant issues. Specifically, revenue pressures from RAF and increased use of outpatient and physician services have negatively impacted performance.
Despite these setbacks, KeyBanc believes that the difficulties are mainly specific to UnitedHealth and can be rectified by 2026. However, there is some investor concern regarding the potential for these issues to persist. A positive takeaway is UnitedHealth's early identification of these pressures, which allows the company to enhance its RAF coding ahead of 2026 and adjust for the higher utilization in its June bids.
Further optimism comes from the anticipated stronger Medicare Advantage rate update for 2026, which is expected to benefit UnitedHealth. KeyBanc also notes that large competitors in the Medicare Advantage space are not particularly well-positioned to capitalize on UnitedHealth's recent hurdles.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 25 analysts, the average target price for UnitedHealth Group Inc (UNH, Financial) is $617.16 with a high estimate of $703.00 and a low estimate of $513.00. The average target implies an upside of 35.90% from the current price of $454.11. More detailed estimate data can be found on the UnitedHealth Group Inc (UNH) Forecast page.
Based on the consensus recommendation from 29 brokerage firms, UnitedHealth Group Inc's (UNH, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for UnitedHealth Group Inc (UNH, Financial) in one year is $707.61, suggesting a upside of 55.82% from the current price of $454.11. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the UnitedHealth Group Inc (UNH) Summary page.
