HSBC has revised its stance on UnitedHealth (UNH, Financial), shifting its rating from Buy to Hold while significantly lowering the price target from $600 to $490. The adjustment follows a reevaluation of cost trends, which the firm and the company initially underestimated. This has led to a notable 12% reduction in UnitedHealth's earnings forecast for 2025.
The financial services firm highlights that unless UnitedHealth pursues acquisitions, there is limited potential for earnings growth upgrades in the coming years. However, HSBC views the 2026 Medicare Advantage rate update as a positive development amidst the challenges.
Additionally, HSBC points out that the prolonged risk of inflation in hospital expenses and Part D prescription drugs has intensified, influenced by ongoing tariff disputes. Considering these factors, the firm assesses a balanced risk and reward scenario for UnitedHealth shares following recent market sell-offs.
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 $582.88 with a high estimate of $677.00 and a low estimate of $490.00. The average target implies an upside of 37.04% from the current price of $425.33. 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 1.8, 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 66.6% from the current price of $425.33. 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.
