Barclays Cuts UnitedHealth Stock (UNH) Price Target as Q2 Earnings Loom
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Wall Street expects UnitedHealth to report EPS of $4.88 for Q2 2025, marking a more than 28% year-over-year decline. UNH stock has plunged 40% year-to-date, due to the Department of Justice's (DOJ) probe into the company's Medicare billing practices, rising medical costs, mainly in the Medicare Advantage (MA) segment, an abrupt CEO exit, and weak Q1 earnings.
Barclays Lowers Price Target But Remains Bullish on UNH Stock
Mok expects UnitedHealth to reinstate its 2025 EPS guidance in the $20 to $21 range, which reflects a 26% decline from the previous year. This outlook indicates MA margins in the range of 0.5% to 1.0%, which the analyst noted is in line with investor expectations.
The analyst contends that while the market is seeking an achievable EPS guidance in the current scenario, he is looking for an 'aggressive 2026 MA bid/benefit commentary' that supports long-term EPS growth in the range of 13% to 16%, given the lower starting point. Mok believes that such guidance would outline a credible path back to EPS of more than $23 for 2026.
Mok added that without strong guidance, investors will have to 'rely on multiple expansion for an attractive return,' which he believes is less compelling in the current cost trend environment. Given margin pressures and the ongoing headwinds, Mok lowered his 2025 and 2026 EPS estimates from $22.70 to $20.05 and from $25.02 to $23.02, respectively.
While the analyst lowered his price forecast for UNH, he remains bullish and contends that the stock deserves a premium valuation compared to its diversified peers due to faster earnings growth from Optum and balanced exposure across MA, Medicaid, Commercial, and Individual Affordable Care Act (ACA).
What Is the Stock Price Forecast for UNH Stock?
Given the current challenges, Wall Street has a Moderate Buy consensus rating on UnitedHealth stock based on 18 Buys, eight Holds, and one Sell recommendation. The average UNH stock price target of $360.04 indicates about 19% upside potential from current levels.
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