Piper Sandler on Tuesday lowered its price target on UnitedHealth Group (UNH) to $396.00 from $417.00, while leaving its rating on the healthcare insurer and services operator at Overweight. The reduced target remains notably above UnitedHealth’s prevailing share price of $281.32, with data showing the stock trades at a price-to-earnings ratio of 14.63.
The research house pointed to what it described as "persistent funding headwinds" affecting the Medicare Advantage business as a key reason for the adjustment. At the same time, Piper Sandler signaled confidence that UnitedHealth would take steps to protect margins in that segment if favorable revisions to rates do not occur in the April Rate Announcement.
In its valuation approach, the firm preserved the same 20x earnings multiple it has used previously, but applied that multiple to somewhat lower forecast adjusted earnings per share for calendar year 2027. That change in forward earnings assumptions, rather than an alteration to the multiple itself, explains the narrower price target.
Piper Sandler emphasized its belief in UnitedHealth’s management, citing strong confidence in the ability of CEO Stephen Hemsley to improve margins at UnitedHealthcare, to restore profitability in Optum Health’s value-based care operations, and to better align the company’s insurance and services businesses.
The firm characterized UnitedHealth’s preliminary guidance for calendar year 2026 as "solid," and noted that the company’s adjusted earnings per share outlook for calendar year 2025 remains consistent with expectations.
Recent quarterly results have added context to the firm’s view. UnitedHealth reported Q4 2025 revenue of $113.2 billion, missing the $113.73 billion expected figure, while reported earnings per share of $2.11 matched projections. The revenue shortfall, and the market’s reaction to it, have prompted investor caution about 2026 and remain a focus for analysts monitoring the company.
Despite those headwinds, UnitedHealth has sustained revenue growth of 10.48% over the trailing twelve months, a performance metric Piper Sandler highlighted in support of its continued Overweight stance.
Context and next steps for investors
- Watch for the April Rate Announcement and any resulting revisions to Medicare Advantage funding, which Piper Sandler regards as pivotal for margin prospects in that business.
- Monitor management commentary and progress on Optum Health’s value-based care profitability and alignment between insurance and services segments.
- Track quarterly revenue and EPS trends, since recent revenue weakness in Q4 2025 has already influenced investor sentiment.