Why Is Bernstein Analyst Cautious on UnitedHealth Group Stock (UNH)?
Elevate Your Investing Strategy:
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Analyst Cuts EPS Forecast on Slower MA Growth
Wilkes trimmed his 2026 EPS forecast to $30.15 per share from $33.01. He highlighted several factors behind the revision. Wilkes expects slower MA membership growth in 2026, as the company focuses on keeping profits up rather than adding new members. He also noted that a higher medical loss ratio in 2025 is likely to reduce the MA margin to around 1%, creating a smaller earnings base for future growth.
Wilkes also noted slower growth in OptumHealth, UnitedHealth's healthcare services unit that manages care and wellness programs. He said weaker Medicare Advantage membership could limit OptumHealth's expansion and revenue growth.
Despite these concerns, he believes that the company still has a strong market position and is working to control its costs.
It should be noted that recently, several top investors and hedge fund managers added to their stakes in this struggling health insurance giant, reflecting long-term confidence in the company. Buffett's Berkshire Hathaway (BRK.B) revealed a new $1.57 billion stake in UNH stock. Further, Michael Burry's Scion Asset Management bought calls on 350,000 shares.
Is UNH a Good Buy Right Now?
average UnitedHealth stock price target implies a 1.96% upside potential.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Health Line
5 hours ago
- Health Line
What Is the price ceiling on insulin with Medicare?
In Medicare, insulin is covered under Medicare Part D, a Medicare Advantage prescription drug (MAPD) plan, or, in some cases, Medicare Part B. Since 2023, the Inflation Reduction Act (IRA) has capped the cost of insulin for Medicare beneficiaries at $35 per month. This means that with any Medicare plan, your out-of-pocket cost for a month's supply of insulin is now capped at this maximum price. In addition, you don't have to meet your plan's deductible to get insulin at this price. What insulin types are covered under the IRA? Part D is a stand-alone private drug coverage plan that you can enroll in along with Original Medicare (parts A and B). In contrast, MAPD is a Medicare Advantage (Part C) plan that bundles Original Medicare benefits and prescription drug coverage in one private plan. Both of these plans will cover a prescription for: an insulin pen you can use to inject yourself insulin that you would use with a disposable insulin pump inhalable insulin However, if you need to use an insulin pump that's covered under the durable medical equipment benefit of Medicare Part B, the plan will cover the pump and the insulin it contains. In this case, since a Part C plan offers all the benefits of Part B, such a plan will also offer the same coverage. How do you qualify for $35 insulin? You must be eligible and enrolled in Medicare to purchase $35 insulin with Medicare. You become eligible for Medicare at the age of 65. You can also get Medicare earlier if you receive Social Security Disability Insurance (SSD) or if you live with either end stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS). In addition, your prescription for insulin must come from a Medicare-approved doctor and be medically necessary. This is usually the case if you live with diabetes. What is the cost of insulin in the U.S. per month? According to a 2020 price analysis, the average United States manufacturer price for insulin was found to be $98.70. Generally, research shows that spending on insulin has nearly tripled between 2002 and 2013, leading to reduced insulin use. The purpose of the Medicare insulin cap was to help make insulin more affordable to Medicare beneficiaries. According to a 2020 price analysis, the average United States manufacturer price for insulin was found to be $98.70. Generally, research shows that spending on insulin has nearly tripled between 2002 and 2013, leading to reduced insulin use. The purpose of the Medicare insulin cap was to help make insulin more affordable to Medicare beneficiaries. What states have capped insulin prices? The IRA's Medicare cap on insulin is nationwide. However, if you are insured by commercial health plans instead of Medicare, there may be alternative insulin caps in your state. The IRA's Medicare cap on insulin is nationwide. However, if you are insured by commercial health plans instead of Medicare, there may be alternative insulin caps in your state. The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthline Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthline Media does not recommend or endorse any third parties that may transact the business of insurance.
Yahoo
8 hours ago
- Yahoo
Dow Jones ETF Outperforming: Will the Rally Continue?
The Dow Jones Industrial Average has been hitting new record highs in recent sessions and is outperforming the other two major indices amid the weakness in the tech sector. Rate cut optimism, sector rotation and strong corporate earnings or actions are driving the blue-chip being said, SPDR Dow Jones Industrial Average ETF DIA, which tracks the Dow Jones, has risen 2.1% over the past week while the Vanguard S&P 500 ETF VOO and Invesco QQQ Trust Series QQQ gained 1.2% and 0.7%, respectively (read: Dow Jones ETF Hits New 52-Week High). Sector Rotation Investors are shifting out of high-flying tech and AI plays and moving into beaten-down and undervalued sectors like industrials, retail, financials and real estate. This shift has driven the rally in the Dow Jones the tech sector has been struggling in recent weeks in the wake of uncertainty surrounding the Trump administration's trade policies. The weakness in the tech sector has led investors to move to value-oriented stocks. Strong Home Depot & UnitedHealth Momentum Two heavy components in the Dow Jones — Home Depot (HD) and UnitedHealth (UNH) — have pushed the index to record highs. Home Depot surged on its steady guidance despite the earnings miss. Meanwhile, UnitedHealth soared last Friday after Berkshire Hathaway disclosed its major stake in the company, valued at approximately $1.6 billion or around 5 million shares in its second-quarter filings (read: Insights Into 13F Filings: ETFs to Invest in Like Billionaires). Growing Rate Cut Bets The blue-chip index has been benefiting from growing market expectations that the Fed will begin cutting interest rates, possibly starting in September, with futures pricing in two 25-bps reductions. Lower rates benefit cyclical sectors like industrials, financials and consumer discretionary the most. It reduces borrowing costs for mortgages, credit cards and other consumer and business loans. This helps businesses to expand their operations more easily, resulting in increased profitability. This, in turn, stimulates economic growth and boosts the stock market. Notably, Dow Jones is highly exposed to cyclical sectors and thus will be the biggest beneficiary of potential rate cuts out of the three major indices. Stable & Value-Oriented The blue-chip index consists of typically less risky stocks. These companies are more established and provide a broader range of products or services, offering some safety in case of an economic slowdown or political issues. Most of the stocks in the Dow Jones Index have a tilt toward value stocks. Value stocks seek to capitalize on the inefficiencies in the market and have the potential to deliver higher returns with lower volatility compared with their growth and blend counterparts. Further, these stocks are less susceptible to trending markets, and their dividend payouts offer safety in times of market turbulence. Let's take a closer look at the fundamentals of DIA. DIA in Focus With AUM of $39.2 billion, DIA holds 30 stocks in its basket, with each security holding no more than a 10% share. The fund is widely spread across sectors, with financials, information technology, consumer discretionary, industrials and healthcare being the top five. It charges 16 bps in fees per year from investors and trades in heavy volume of around 4 million shares a day on average. The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco QQQ (QQQ): ETF Research Reports SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
8 hours ago
- Yahoo
Michael Burry is Betting Big on This 1 S&P 500 Stock That's Down 40% in 2025
Michael Burry, the legendary investor famous for predicting the 2008 housing crisis, has taken a new position in UnitedHealth Group (UNH) through his Scion Asset Management, according to 13F filings for the second quarter. UnitedHealth stock has been battered in 2025, falling nearly 60% from all-time highs through last Thursday before surging 12% on Friday, Aug. 15 following Warren Buffett's surprise disclosure of a $1.6 billion stake. The healthcare giant has faced intense scrutiny as the poster child for America's rising healthcare costs. More News from Barchart As SoFi Launches International Money Transfer Services, How Should You Play SOFI Stock? This Cannabis Stock Just Transformed Into a Bitcoin Treasury Play. Should You Buy Shares Now? Profiting from Volatility: CRWV Long Straddle Trade Setup Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! The nation's largest private health insurer is navigating multiple headwinds. CEO Andrew Witty stepped down in May after the company pulled its annual earnings outlook. A Justice Department investigation into Medicare billing practices has added regulatory pressure, while the company's revised 2025 outlook fell well short of Wall Street expectations. Burry's investment suggests he sees opportunity amid the turmoil. This adds on to Buffett's investment, which analysts say 'represents a big vote of confidence' and could provide a 'trading floor' for the managed care sector. With UnitedHealth trading at deeply discounted levels despite its market-leading position, contrarian investors like Burry may be betting the current challenges are temporary while the long-term healthcare demand thesis remains intact. Is UNH Stock a Good Buy Right Now? UnitedHealth Group's Q2 earnings call revealed near-term pressures, but also highlighted compelling reasons why the healthcare giant could emerge stronger for long-term investors. UnitedHealth's medical costs have been rising faster than expected. The company initially estimated costs to go up about 7.5% this year, but they're actually rising even more. For 2026, UnitedHealth is being much more conservative and assuming medical costs will rise by nearly 10%. The company is responding by: Raising prices - Charging higher premiums to customers to cover the increased medical costs. Cutting benefits - Reducing what services insurance plans will cover or making customers pay more out of pocket. Using narrower networks - Limiting which doctors and hospitals customers can use (typically to cheaper, more efficient providers). These changes take time to work through the system. Most of UnitedHealth's contracts renew on Jan. 1, so the 2026 changes will start helping their profits next year, with full benefits showing up by 2027. CEO Stephen Hemsley has initiated comprehensive operational reforms, including monthly business reviews, enhanced forecasting processes, and significant management changes across Optum. Moreover, UNH is investing heavily in AI capabilities and modernizing its technology stack, which should drive long-term efficiency gains. Despite execution challenges, OptumHealth's value-based care model continues to demonstrate superior outcomes with 20% fewer hospitalizations and 11% fewer ER visits versus. Mature patient cohorts (2021 and prior) are achieving 8%-plus margins, proving the model's viability once properly executed. UNH stock remains the dominant player in multiple healthcare segments with unmatched scale advantages. Its integrated model combining insurance, pharmacy benefits, and care delivery creates defensive moats that competitors struggle to replicate. What Is the Target Price for UNH Stock? Analysts tracking UNH stock forecast adjusted net income to expand from an estimated $16.24 per share in 2025 to $32.22 per share in 2029. Today, UNH stock trades at a forward price-earnings multiple of 19x, which is in line with the 10-year average. If it trades at a similar multiple, the healthcare stock should trade around $608 in early 2029, indicating an upside potential of over 100% from current levels. Out of the 25 analysts covering UNH stock, 15 recommend 'Strong Buy,' two recommend 'Moderate Buy,' six recommend 'Hold,' and two recommend 'Strong Sell.' The average UNH stock price target is $306.62, roughly in line with the current trading price. On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
