Key Stats for UnitedHealth Stock
- Current Price: $376.59
- Target Price (Mid): ~$600
- Street Target: ~$482
- Potential Total Return: ~60%
- Annualized IRR: ~12% / year
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What Happened?
UnitedHealth Group (UNH) named Jodee Kozlak its first chief administrative officer on September 24, effective September 28, to oversee People, Real Estate, Procurement, and Corporate Security, two days after elevating Dan Kueter to chief commercial officer. Shares closed at $376.59 on September 25, up 14.1% from the $330.11 year-end 2025 close but about 18% below the intraday 52-week high of $461.62. Its investor relations materials and a September 9 conference appearance point to Medicaid and Optum Health turning in 2027, which favors holding or adding over selling ahead of third-quarter results on October 13, before the market opens.
Medicaid and Optum Health Set Up 2027
At the Wells Fargo Healthcare Conference, Chief Financial Officer Wayne DeVeydt said blended Medicaid rate increases of 6% to 7% arrived as expected, putting 2026 margins near the better end of the company’s negative 1% to negative 1.7% range. He said “we feel this will be a trough year on Medicaid margins and then moving back to breakeven or profitability going into next year.” Where states fell short on rates, he described an understanding that relief would be trued up if trends persist, though Medicaid work requirements add uncertainty.
Optum Health, the care-delivery unit, posted a $278 million operating loss in 2025. DeVeydt told Bloomberg its margin should reach around 2% in 2026, 4% in 2027, and 6% in 2028. Optum Health CEO Krista Nelson said the unit is “in a position to expand margin by points inside ’27” as it paces toward a 6% to 8% target.
Medicare Advantage margins are tracking toward the upper half of the 2% to 4% range, while commercial insurance lags, with margins flat so far in 2026 rather than expanding as planned. Declining to discuss third-quarter results, DeVeydt said the favorable trends seen earlier in the year had held in the nearly two months since the second-quarter report: “that durability has not dissipated.” Analysts expect third-quarter adjusted EPS of about $4.15, up around 42% year over year, on slightly lower revenue.
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More Room for Buybacks, More Scrutiny on Medicare
With debt-to-capital at 41.2% on June 30 and headed toward 40% by the fourth quarter, DeVeydt expects to repurchase stock “at a much more aggressive pace” over the next five years. He also described a multiyear cost program aimed at taking “billions” out of the system, which Optum CFO Benjamin Eklo said centers on automating claims, approvals, and back-office work.
A September HHS Office of Inspector General audit estimated that UnitedHealthcare of Wisconsin received at least $46.9 million in Medicare Advantage overpayments for 2020 and 2021, citing diagnosis codes unsupported by medical records. A parallel audit put Humana’s (HUM) HumanaChoice plan at about $131 million. UnitedHealthcare disagreed with some findings and asked OIG to withdraw its recommendations, so these are audit findings, not penalties.
Star ratings are the other October test. DeVeydt said the company improved on all four pharmacy measures and 10 of 12 HEDIS quality measures but “went backwards on CAHPS,” the member-experience surveys, after benefit cuts. CMS typically publishes new ratings in October; for 2026, UnitedHealthcare had 78% of Medicare Advantage members in plans rated 4 stars or higher, the level that earns bonus payments.
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TIKR Advanced Model Analysis
- Current Price: $376.59
- Target Price (Mid): ~$600
- Potential Total Return: ~60%
- Annualized IRR: ~12% / year
See analysts’ growth forecasts and price targets for UnitedHealth stock (It’s free!) >>>
The mid case is shown because it needs no rerating: EPS grows around 10% a year while the P/E multiple drifts about 1% a year lower, on revenue growth of around 6% and a net income margin just under 5%. Medicaid’s return to breakeven and Optum Health’s margin climb are the drivers to test, and Medicare Advantage regulation is the main risk.
Upside comes if Medicaid turns profitable in 2027; downside comes if audits or Star ratings cut revenue first. The target is a scenario, and sits about 25% above the ~$482 Street mean.
Conclusion
October 13 sets the near-term call. Adjusted EPS at or above the roughly $4.15 consensus, a reaffirmed $19.50 to $20.00 full-year guidance range, and a repeated call that Medicaid bottoms in 2026 would favor loading up. A medical-cost miss, or Star ratings that show the CAHPS slip, would suggest the 14% gain came early.
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Should You Invest in UnitedHealth?
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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!
