Overview
TD Cowen reduced its price target for UnitedHealth Group (NYSE: UNH) to $311.00 from $338.00, while leaving its rating on the shares at Hold. At the time of the update the firm noted that the new target implies approximately 6.2% upside from UnitedHealth's then-current share price of $292.81. InvestingPro data is cited as indicating the stock may be materially undervalued under its Fair Value model, and highlights that the company's current price-to-earnings ratio of 21.37 looks comparatively low versus near-term earnings growth potential.
Updated earnings assumptions
TD Cowen moved its earnings-per-share forecasts for UnitedHealth, raising its 2026 EPS view to $17.53 from a prior $17.27 and trimming its 2027 EPS projection to $19.44 from $19.95. The firm said these adjustments reflect assumptions embedded in UnitedHealth's 2026 guidance, including expectations for margin improvement in both the Commercial and Medicare businesses alongside year-over-year margin deterioration in Medicaid.
For 2027 the firm factored in what it described as a "worse-than-anticipated" Medicare Advance Notice. TD Cowen assumed a 2027 Medicare Advantage per-member-per-month rate increase of 4% resulting from improvements in the Final Notice, with the 4% figure incorporating roughly 200 basis points of rate improvement from the Advance Notice plus additional contributions from coding and Part D dynamics.
Valuation methodology
The $311 target is derived from applying a 16.0x price-to-earnings multiple to TD Cowen's 2027 EPS estimate. That multiple and the firm’s EPS assumptions together produce the revised target cited in the update.
Dividend and shareholder support
TD Cowen's note reiterates UnitedHealth's cash-return attributes: a 3.01% dividend yield and a dividend increase streak extended to 16 consecutive years.
Other analyst moves
The update comes amid a broader wave of analyst-level repositioning around UnitedHealth driven by evolving Medicare Advantage rate expectations. Recent analyst actions included:
- KeyBanc Capital Markets - reiterated an Overweight rating with a $400 price target.
- Bernstein SocGen Group - lowered its price target to $405 while maintaining an Outperform rating.
- UBS - trimmed its price target to $410 and kept a Buy rating, noting plans to push for broader data use in rate-setting.
- Jefferies - cut its price target to $340 from $418.
- RBC Capital - reduced its target to $361, citing a weaker-than-expected advance rate notice but holding an Outperform rating.
The firm-specific changes underscore ongoing uncertainty about Medicare Advantage funding and its potential impact on earnings trajectories.
Research signals
InvestingPro is referenced for its Fair Value assessment, which the article says suggests the shares could be significantly undervalued against that model. The platform also flags the company's current P/E as relatively modest versus expected near-term earnings growth, and offers expanded Pro Research coverage of UnitedHealth.
Implications for markets and investors
The revisions and cross-firm rating activity reflect concentrated analyst attention on Medicare Advantage rate developments and segment margin paths. Those factors are central to near-term earnings visibility for UnitedHealth and bear on investor assessments of valuation and income yield given the company's multi-year dividend grower status.
Note on coverage
This article compiles and restates analyst estimates, price targets, and rating actions as provided in the most recent firm updates.