On Monday, Cantor Fitzgerald reiterated its Overweight rating on UnitedHealth Group (NYSE:UNH) shares with a steady price target of $700.00. The healthcare giant, currently valued at $494 billion, has shown impressive momentum with a 20.6% return over the past year. According to InvestingPro data, analysts maintain a strong bullish consensus on the stock, with an average rating of 1.25 (where 1 is Strong Buy). The firm’s analyst, Sarah James, expressed confidence in the company’s performance, anticipating that UnitedHealth is poised to surpass its 2025 guidance. James predicts potential upward revisions to the company’s financial outlook, likely in the second or third quarter of 2025, rather than the immediate first quarter. This optimism aligns with UnitedHealth’s solid fundamentals, earning a "GREAT" Financial Health score on InvestingPro, supported by 7.7% revenue growth in the last twelve months.
UnitedHealth Group has not provided a mid-quarter update for the first quarter of 2025, which is a deviation from the norm among its peers. However, James believes that this has not led to an expectation of a significant outperformance or guidance raise for the quarter. Instead, any positive variance might be attributed to the company’s conservative reserve allocations for the rest of the year.
Investors are currently expecting a medical loss ratio (MLR) of 85.5% for UnitedHealth in the first quarter, slightly more optimistic than the FactSet consensus of 85.9%. The MLR measures the percentage of premiums that an insurer spends on claims and related activities. A lower MLR can indicate better profitability for insurance companies.
James also pointed out that UnitedHealth is unique among its peers for not including high flu-related costs in its MLR guidance. This conservative stance could lead to some pressure on the company’s MLR for the first quarter of 2025. However, the analyst’s overall outlook remains positive, suggesting that UnitedHealth is likely to perform well in the upcoming quarters. Investors should note that UnitedHealth will report its next earnings on April 17, 2025. For deeper insights into UNH’s valuation and comprehensive analysis, including 13 additional ProTips, check out the full research report available on InvestingPro.
In other recent news, Bank of America has provided a positive outlook for CVS Health (NYSE:CVS), highlighting improvements in its reserve positioning. Analysts noted that CVS Health now holds a stronger reserve position, marking a significant improvement from its previous standing. Meanwhile, UnitedHealth Group has included Vertex Pharmaceuticals (NASDAQ:VRTX)’ newly approved non-opioid pain medication, Journavx, in its coverage, but at a higher cost tier. The drug has been placed on tier 3 of UnitedHealth’s Optum Rx drug plan, indicating it is considered a "non-preferred" brand with potentially higher patient costs.
Bernstein analysts have identified UnitedHealth Group and Agilon Health as key players in the value-based care sector, anticipating a sector recovery by 2025. They project a more favorable market environment, driven by improving Medicare Advantage margins and slowing medical cost growth. Cantor Fitzgerald has also weighed in on the healthcare sector, identifying Centene (NYSE:CNC) Corporation and Molina Healthcare (NYSE:MOH) as undervalued amidst policy uncertainties. They suggest that market valuations have been overly penalized due to legislative concerns that may not materialize.
Additionally, UnitedHealth Group has been in the spotlight due to a legal case involving the alleged murder of one of its executives, Brian Thompson. The U.S. Attorney General has directed prosecutors to seek the death penalty for the accused, Luigi Mangione. These developments come as investors continue to monitor the evolving landscape of the healthcare industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.