Key Takeaways
- UnitedHealth stock is up 11% in the past week (through Tuesday’s close), after a third-quarter beat and a raised 2026 outlook for adjusted EPS of at least $20.50.
- The stock lost an early gain on earnings day, then climbed as analysts raised their targets and investors moved out of tech.
- The rally can go further, because UnitedHealth’s operating margin is still well below its 2024 level and the stock trades below its five-year average multiple.
- Members are still leaving, so 2027 guidance, likely early next year, is the next big test.
Wall Street took a day to come around on UnitedHealth Group (UNH), then kept buying: shares are up 11% in the past week (through Tuesday’s close), as the Nasdaq 100 fell 3.5%.
The market came around in a day
Before the open on Oct. 13, UnitedHealth reported third-quarter adjusted EPS of $4.69, beating the $4.14 expected, and raised its 2026 outlook to at least $20.50 a share. CEO Stephen Hemsley credited “the discipline and execution our teams are bringing to every part of our business.”
The stock gave up an early jump that morning. Then the buying started: shares rose 4.7% on Oct. 14 as Goldman Sachs and Piper Sandler lifted their targets, 2.8% on Oct. 15 as investors swapped tech for safer names, and 3% on Tuesday as RBC raised its target to $498 and the rest of managed care rallied.
Margins still have room to run
Revenue slipped to $112.7 billion, but earnings from operations jumped to $6.6 billion from $4.3 billion a year earlier (helped by a $610 million reserve release).
That’s an operating margin of about 5.9%, well below the 8.64% it posted in the third quarter of 2024. The yearly margin ran above 8% from fiscal 2021 through fiscal 2024, then fell to 4.8% in fiscal 2025.
Each point of margin UnitedHealth recovers adds about $4.5 billion of yearly operating profit.
TIKR tracks 26 analysts on UnitedHealth. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on UnitedHealth, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See UnitedHealth’s Analyst Ratings
Membership is the number to watch
Management said 2027 estimates may be too low, pointing to the bottom of its 13% to 16% long-term growth range as a reasonable base. Consensus has normalized EPS rising from $20.59 this year to $23.26 in 2027.
But medical costs are still high, and members keep leaving: UnitedHealthcare served 48.3 million people at September’s end, down from 48.5 million in June. The 2027 guidance, likely due early next year, needs to show that steadying.
Still cheaper than usual
Before Tuesday’s gain, UnitedHealth traded at 18.0x forward earnings, below its five-year average of 19.5x and under its 25.2x peak in April 2022.
(Closer to 18.5x after Tuesday.)
Post-report targets run from TD Cowen’s $402 to JPMorgan’s $524, and the $477 consensus sits about 14% above Tuesday’s close.
My take: the rally has more room. The margin has about 3 points left to recover, and the stock still trades below its usual multiple. Of course, if 2027 guidance shows members still leaving, margins alone can’t carry it much further.
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!
