Argus Research has downgraded UnitedHealth Group (UNH, Financial) from a Buy to a Hold rating following the company's decision to revise its 2025 financial guidance. The decision comes after a reported increase in medical costs within its Group Medicare Advantage segment, alongside underwhelming performance in its Optum Health division.
The ongoing pressures from rising medical costs in the Group Medicare Advantage business are expected to persist through at least the first half of 2025. This has raised concerns about UnitedHealth's ability to maintain profitable growth within its managed-care operations, according to analysts.
In response to the updated guidance, Argus has adjusted its earnings projections for UnitedHealth. The firm now forecasts an adjusted earnings per share (EPS) of $26.25 for 2025, significantly down from the previous estimate of $29.70. For the year 2026, the EPS estimate has also been lowered to $31.00 from $33.30.
The firm's downgrade reflects the challenges UnitedHealth faces in navigating rising costs, which could impede its growth trajectory in the coming years.
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 43.37% from the current price of $430.46. 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 $708.61, suggesting a upside of 64.62% from the current price of $430.455. 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.
