Bernstein SocGen has reiterated an Outperform rating on UnitedHealth Group (NYSE: UNH) and kept a $405.00 price target after the stock experienced significant volatility tied to recent Medicare Advantage (MA) advance rate announcements and the company’s fourth-quarter earnings report.
Analyst Lance Wilkes responded to investor questions following a roughly 20% decline in UnitedHealth shares that occurred after the MA advance rate announcement on Monday and the firm’s quarterly results on Tuesday. Wilkes highlighted five primary areas of investor concern that emerged in the aftermath of those events.
Those concerns include requests for an explanation of the unexpected MA advance rate, assessments of how the rate will influence Medicare Advantage margins, and differing estimates of the potential impact on UnitedHealth’s earnings per share. Wilkes also flagged investor puzzlement over the magnitude of the stock’s decline and noted attention to another insurer’s results - Elevance Health - whose earnings announcement appeared to have a positive ripple effect on both Elevance and UnitedHealth shares.
Bernstein said it has updated its financial model for UnitedHealth to reflect these developments but has maintained its Outperform rating despite the market reaction. The analyst group cited a slower recovery in the company’s price-to-earnings multiple as a factor in its updated target, linked to the outlook for Medicare Advantage funding.
Other major firms have also moved their UnitedHealth assessments in recent days. TD Cowen lowered its price target to $311 while keeping a Hold rating and adjusted its earnings-per-share estimates for 2026 and 2027. KeyBanc Capital Markets reiterated an Overweight rating and a $400 price target, even as it voiced concerns that Medicare Advantage rate proposals could pressure future margins and earnings growth.
Bernstein SocGen’s reduced price target to $405 was explicitly tied to concerns about the pace of a P/E recovery given the Medicare Advantage funding outlook. UBS likewise trimmed its target to $410 while maintaining a Buy rating and noted plans to press for broader data usage in Medicare rate determinations.
Taken together, these moves by analysts underline continuing uncertainty about UnitedHealth’s near-term earnings trajectory and growth prospects, with Medicare Advantage rate discussions playing a central role in market and analyst reaction.
Summary
Bernstein reaffirmed an Outperform rating and a $405 price target on UnitedHealth after the insurer’s shares fell about 20% following Medicare Advantage advance rate disclosures and quarterly results. Lance Wilkes identified five core investor questions and the firm updated its model to reflect the new information. Other analysts have adjusted price targets and projections amid persistent uncertainty over MA funding and margin implications.
Key points
- Bernstein SocGen retains Outperform on UnitedHealth with a $405 target after updating its model.
- Analyst Lance Wilkes outlined five main investor concerns, including the unexpected MA advance rate and potential MA margin impacts.
- Several major firms - TD Cowen, KeyBanc, Bernstein SocGen, and UBS - have changed price targets or reiterated ratings, reflecting broader market uncertainty in the healthcare insurer sector.
Risks and uncertainties
- Medicare Advantage advance rate outcomes could materially affect UnitedHealth’s margins and earnings - a direct risk to the healthcare insurers sector.
- Continued share-price volatility following MA funding news and quarterly earnings could influence investor confidence and market valuation for large insurers.
- Analyst revisions to price targets and EPS estimates underscore uncertainty about the pace of earnings and P/E multiple recovery for UnitedHealth.