Key Takeaways
- UnitedHealth shares rose 3.5% today after RBC Capital raised its price target to $498 from $478, and other managed care stocks rose with it.
- RBC has the better argument: earnings are recovering and the stock still trades below its usual multiple.
- Jefferies, Baird and Raymond James cut their targets after the third-quarter beat. Raymond James blamed a lower multiple, citing worries about the elections and regulation.
- Centene’s Oct. 27 report and Humana’s Nov. 6 report are the next test of the group rally.
UnitedHealth Group (UNH) shares are up 3.5% today after RBC Capital raised its price target to $498 from $478 before the open and kept its Outperform rating.
UnitedHealth had company. Humana (HUM) is up 3.4%, Centene (CNC) 2.8%, Cigna (CI) 2.4% and Elevance Health (ELV) 2.0%. Cigna and Elevance had no news of their own to explain it, and neither did Humana or Centene.
TIKR tracks 26 analysts on UnitedHealth. How many say “Buy”?
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The beat set this up
RBC’s raise comes a week after UnitedHealth’s third-quarter report on Oct. 13. Adjusted EPS came in at $4.69, beating consensus by 57 cents. The medical loss ratio was 88.4%, against the 89.9% the Street expected. Management raised its 2026 adjusted EPS guidance to at least $20.50, from $19.50 to $20.
Analysts now see that recovery running for two more years. Consensus has normalized EPS rising from $16.35 in 2025 to $20.59 this year, $23.26 in 2027 and $26.98 in 2028, nearly back to 2024’s $27.66.
Not everyone followed RBC up
After the report, Jefferies cut its target to $453 from $490 and Baird cut its own to $427 from $453. Raymond James trimmed its target to $450 from $475.
Raymond James said why. Investors are nervous about the midterm elections and possible rule changes to Medicare Advantage risk adjustment and Star Ratings. So it now values the stock at about 16x its 2028 EPS estimate.
Even so, the cuts left the Street’s average target close to where it was. It slipped from a high of $482 in mid-September to $478 on Monday, with targets running from $380 to $529.
RBC’s $498 sits above that average, and the multiple is where the bulls see room. UnitedHealth traded at 18x forward earnings at Monday’s close, a bit more after today’s move. Its five-year average is 19.5x, and it peaked at 25.2x in April 2022.
RBC has the better argument
My take: RBC is on the right side of this one. Management just raised guidance, analysts see earnings climbing nearly back to 2024’s level by 2028, and the stock still trades below its usual multiple.
The regulatory worry is real, though. A change to how Medicare Advantage plans are paid would hit the 2028 estimates that every one of these targets leans on.
Centene reports on Oct. 27 and Humana on Nov. 6. Those reports will show whether today’s group rally has the numbers behind it.
So what is UnitedHealth stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
