Leerink Partners analyst Whit Mayo reiterated a Buy rating on UnitedHealth (UNH – Research Report) on April 16 and set a price target of $560.00.
Whit Mayo has given his Buy rating due to a combination of factors surrounding UnitedHealth’s financial performance and market valuation. Despite a challenging quarter, UnitedHealth maintained control over costs, with an adjusted Medical Loss Ratio (MLR) slightly higher year-over-year but within expectations. The company also demonstrated confidence in its long-term growth targets, even with impending changes to Medicare Advantage in 2025. Moreover, UnitedHealth has been proactive in establishing higher reserves to offset limited visibility on claims, which suggests a prudent approach to financial management. This level of caution is seen as a positive indicator of the company’s ability to manage future uncertainties.
Additionally, the valuation of UnitedHealth’s stock is currently near a three to four-year low, presenting a discount compared to its historical premium against the S&P 500 index. This undervaluation, combined with the company’s steady growth estimates and stable earnings, provides a favorable backdrop for a Buy recommendation. Despite some potential disruption from Change Healthcare, Whit Mayo maintains a price target of $560, underpinned by a consistent P/E multiple that aligns with the company’s estimated long-term earnings growth. The balance of these elements points to UnitedHealth being an attractive investment opportunity with room for appreciation.
Mayo covers the Healthcare sector, focusing on stocks such as Humana, Pediatrix Medical Group, and Cigna. According to TipRanks, Mayo has an average return of 1.0% and a 46.45% success rate on recommended stocks.
In another report released yesterday, Morgan Stanley also maintained a Buy rating on the stock with a $595.00 price target.
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UnitedHealth (UNH) Company Description:
UnitedHealth Group, Inc. is a diversified healthcare company, offering healthcare coverage and benefits services through UnitedHealthcare, and information and technology-enabled health services through Optum. The company was founded by Richard T. Burke in January 1977 and is headquartered in Minneapolis, MN.
