Oppenheimer Reduces PT on UnitedHealth Group (UNH) Stock

UnitedHealth Group Incorporated (NYSE:UNH) is one of the Best 52-Week Low Blue Chip Stocks to Buy Now. On July 30, Oppenheimer analyst Michael Wiederhorn reduced the price objective on UnitedHealth Group Incorporated (NYSE:UNH)’s stock to $325 from $400, while keeping an “Outperform” rating, as reported by The Fly. It noted that the company reinstated 2025 adjusted-EPS guidance of $16.00-plus, which can be trough earnings, as UnitedHealth Group Incorporated (NYSE:UNH) returns to growth in 2026 and beyond.

The 2025 guidance assumes performance at the bottom-end or below target ranges throughout Medicare, Medicaid, Commercial, and OptumHealth segments, though the firm opines that such metrics will improve significantly over the upcoming 2 years as UnitedHealth Group Incorporated (NYSE:UNH) re-prices its respective books. The company expects moderate EPS growth in 2026, with acceleration thereafter.

UnitedHealth Group Incorporated (NYSE:UNH) has updated its 2025 outlook, which includes revenues of $445.5 billion – $448.0 billion, net earnings of at least $14.65 per share, and adjusted earnings of at least $16.00 per share. This implies H1 2025 performance and expectations for the balance of the year, including higher realized and anticipated care trends.

Baron Funds, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:

“UnitedHealth Group Incorporated (NYSE:UNH) is a diversified health and well being company with $450 billion in annual revenue, operating across four segments: UnitedHealthcare, Optum Health, Optum lnsight, and Optum Rx. Shares fell sharply during the quarter after the company missed earnings estimates and cut its 2025 earnings per share guidance, citing higher-than-expected medical costs in its Medicare Advantage business. Investor confidence was further shaken in early May by the abrupt departure of CEO Andrew Witty and the suspension of 2025 guidance. The company also mispriced its Medicare Advantage business for 2025—a challenge compounded by reimbursement changes and an influx of newly acquired members who had not been properly risk coded. While we acknowledge UnitedHealth’s potential to restore profitability in this segment over time through disciplined pricing and benefit adjustments, we chose to exit our position during the quarter in favor of other opportunities.

Aside from cash exposure, which accounted for over half of the outperformance in the period, higher exposure to better performing health care distributors and equipment stocks and lower exposure to Benchmark heavyweight UnitedHealth Group Incorporated in managed health care accounted for most of the remaining relative gains. UnitedHealth’s shares fell sharply during the quarter after the company missed earnings estimates and cut its 2025 EPS guidance, citing higher-than-expected medical costs in its Medicare Advantage business. Investor confidence was further shaken in early May by the abrupt departure of CEO Andrew Witty and the suspension of 2025 guidance. UnitedHealth has historically commanded a premium valuation, reflecting its scale advantages, integrated care model, industry-leading innovation, and consistent execution.

We sold UnitedHealth Group Incorporated because the company lowered guidance shortly after reporting earnings and then suspended guidance shortly after that. Management cited three issues: greater-than-expected impact from the health status of new members, higher-than-expected cost trends in the Medicare Advantage business, and a broadening of this higher trend to the Medicaid and commercial business. Some of these issues could potentially be fixed in the short term through repricing, but we felt management’s lack of visibility raised too many questions about the long-term earnings potential of the business. We plan to revisit the investment thesis after new management conducts its comprehensive review and resets earnings guidance.”

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Disclosure: None. This article is originally published at Insider Monkey.