‘Nothing Is OK' Says Bank of America on UnitedHealth Stock (UNH) Despite Warren Buffett's New Bet
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Earnings Are Key, But Timing Matters
Fischbeck noted that UNH has strong earnings potential, but meaningful stock growth will take time. The company's guidance of $16 per share for 2025, with growth to around $16.80–$17 in 2026, sets a realistic near-term expectation. For significant upside beyond this, UNH needs consistent results driven by operational strength rather than one-off gains.
Fischbeck emphasized that steady earnings beats and modest increases will be key to rebuilding investor confidence.
Medicare Advantage Stars Could Impact Profitability
Another key uncertainty for UNH lies in its Medicare Advantage (MA) business. The Centers for Medicare & Medicaid Services (CMS) will release the 2027 'stars' ratings in mid-October, showing what percentage of UNH's MA members qualify for a 5% quality bonus. These ratings are crucial because they directly influence profitability.
Fischbeck said that if UNH's ratings fall, it could delay a return to normal profit margins and affect the stock's performance for another year.
Analyst Points to Coding Adjustments as Major Risk
Fischbeck pointed to a key risk for UNH in its Medicare Advantage business. The company's revenue could be affected if the government changes the rules for how it counts patient data, a process known as coding. Any new adjustment could reduce the revenue UNH earns from these plans and erase some of the gains the company expects in the next few years.
Looking Ahead
Despite these near-term risks, Fischbeck remains constructive on UNH's long-term prospects. He believes that patient investors who can focus on a multi-year horizon could benefit from the company's underlying strength, steady growth in health care demand, and potential upside in 2027.
Is UNH a Good Buy Right Now?
average UnitedHealth stock price target implies a 2.94% upside potential.
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