Key Takeaways:
- UnitedHealth stock could conservatively be worth over $458/share by the end of 2027.
- That’s a potential 48% upside from today’s price of ~$309/share.
- UNH stock is projected to benefit from business stabilization and margin recovery as the company navigates Medicare Advantage headwinds and returns to long-term growth targets.
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UnitedHealth (UNH) is the largest healthcare company in the United States, operating through two primary segments: UnitedHealthcare (insurance) and Optum (healthcare services, technology, and pharmacy benefits).
The insurance heavyweight faced significant challenges in 2025, including higher-than-expected medical costs and issues with its membership profile, which led to multiple revisions of guidance and a leadership transition back to former CEO Stephen Hemsley.
We ran UNH stock through a comprehensive valuation model to assess its current value and potential upside for investors.
Using reasonable assumptions based on the company’s historical performance and recovery trajectory, the model suggests UNH could be worth over $458/share by the end of 2027. That would imply a 48% upside from UnitedHealth’s current share price of $309.11.
The compelling aspect of this forecast is that it assumes the company successfully addresses current operational challenges while returning to its long-term earnings growth target of 13-16%.
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What UnitedHealthcare Does
UnitedHealth operates the largest health insurance business in the U.S. through UnitedHealthcare, serving over 50 million members across Medicare Advantage, commercial insurance, and Medicaid programs.
The company’s Optum division offers healthcare services through three segments: OptumHealth (focused on value-based care and primary care), OptumInsight (providing healthcare technology and analytics), and OptumRx (a pharmacy benefit management service serving 26 million members).
The integrated model enables UnitedHealth to control costs and enhance outcomes across the entire healthcare value chain, from insurance coverage to care delivery to prescription management.
Here’s why UNH stock could deliver strong returns over the next 2.5 years, thanks to the successful navigation of current challenges and a return to historical growth patterns.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
In our valuation, we’ll simply use analysts’ consensus estimates and break down what analysts think the stock is worth today.
Here’s what we used for UNH stock:
1. Revenue Growth: 8.6% CAGR
UnitedHealth stock has demonstrated consistent growth, with 7.7% revenue growth over the past year and 11.7% annual growth over the last three years.
We project continued solid growth of 8.6% annually through 2028, driven by membership expansion, aging demographics, and growth in Optum services.
2. Operating Margins: 7.4%
UnitedHealth’s EBIT margins have compressed to 8.1% over the last 12 months due to pressures from Medicare Advantage and integration challenges.
We project that margins will average 7.4% through 2028, as the company addresses current issues and implements operational improvements.
3. Exit P/E Multiple: 13.8x
UnitedHealth currently trades at reasonable multiples given the temporary headwinds. We used a 13.8x P/E multiple, which represents the current trading level, assuming the market maintains a similar valuation as operational performance stabilizes.
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What the Model Says for UNH Stock
With these inputs, the valuation model estimates that UnitedHealth’s stock could reach approximately $458/share by the end of 2027.
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That represents a potential gain of 48% from today’s price of around $309. The model shows this would translate into an annualized return of approximately 17% over the next 2.5 years.
This forecast reflects UnitedHealth’s ability to resolve current medical cost trends and membership profile issues while returning to its target earnings growth range.
The model forecasts the business’s future earnings-per-share based on revenue growth and margin expansion, then applies a P/E multiple to estimate the future stock price.
This helps investors understand what financial performance is required to generate strong returns and how much upside is available if those expectations are met.
What Happens If Things Go Better or Worse?
The model enables various scenarios based on the success of execution and external healthcare policy factors.
Here’s the range of potential outcomes:
- Low Case: Continued margin pressure with slower recovery → 8-11% annual returns.
- Mid Case: Successful resolution of current issues → 14-17% annual returns.
- High Case: Accelerated value-based care adoption and efficiency gains → 17-20% annual returns.
Even the conservative scenario offers attractive returns given UnitedHealth’s market leadership and diversified healthcare platform, while the upside case reflects successful execution of the integrated care strategy.
UnitedHealth’s earnings growth is likely to be driven by a combination of factors:
- Medicare Advantage Stabilization: The insurance giant is incorporating higher cost trends into 2026 bids and expects to return to target margin ranges through appropriate pricing and risk management.
- Value-Based Care Expansion: OptumHealth anticipates adding 650,000 new value-based care patients in 2025, bringing the total to 5.4 million patients in arrangements that enhance outcomes while reducing costs.
- Optum Services Growth: OptumRx experienced 14% growth, driven by strong customer retention, while OptumInsight continues to launch AI-powered tools that increase productivity by over 20% for customers.
- Membership Growth: UnitedHealthcare anticipates serving 800,000 additional Medicare Advantage members in 2025, further demonstrating its continued market leadership and commitment to member satisfaction.
- Operational Efficiency: The company continues to focus on cost management and technological advancements to drive sustained improvements in operating efficiency.
How the Street Sees UNH Stock
Wall Street analysts maintain a positive long-term view on UnitedHealth despite near-term challenges. The average target price for UNH stock is $385, indicating a 25% upside from current levels.
We can see that the target price for UNH stock in our valuation model is much higher than consensus estimates. However, the consensus estimates provide a price target for the next 18 months, while our investment horizon extends up to the end of 2027.
There is a good chance that UNH stock will exceed Wall Street estimates and trade at a higher multiple, given its solid earnings forecasts.
Moreover, the company’s track record of navigating regulatory changes and market challenges lends confidence to its long-term value creation.
See analysts’ growth forecasts and price target for UnitedHealth (It’s free!) >>>
Risks to Consider
Despite the bullish outlook, investors should be aware of several risks that could impact UnitedHealth’s growth trajectory:
- Medicare Advantage Pressures: Continued government funding cuts and risk model changes (V28) could pressure margins longer than expected if care cost trends don’t stabilize.
- Regulatory Scrutiny: PBM reform proposals and healthcare policy changes could impact Optum’s business model and profitability.
- Integration Execution: Successfully managing the complex integration of insurance and care delivery requires continued operational excellence and investment.
- Competition: Increased competition in Medicare Advantage and value-based care could pressure market share and pricing power.
- Medical Cost Inflation: Persistent healthcare cost inflation beyond a company’s control could impact its long-term margin expansion potential.
TIKR Takeaway
UnitedHealth Group has built the most comprehensive healthcare platform in the U.S., with market-leading positions across insurance, care delivery, and pharmacy services.
Suppose UNH successfully navigates the current challenges in Medicare Advantage while continuing to execute its value-based care strategy. In that case, we believe the stock offers compelling recovery potential for long-term investors.
The 48% upside potential over the next 2.5 years reflects both the temporary nature of current headwinds and a proven ability to adapt and grow in the evolving healthcare landscape.
Is UNH stock a buy over the next 24 months? Use TIKR’s Valuation Model alongside analysts’ growth forecasts and price targets to see if it is undervalued today.
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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 stocks mentioned. Thank you for reading, and happy investing!
