UnitedHealth Group Incorporated (UNH): A Bull Case Theory

We came across a bullish thesis on UnitedHealth Group Incorporated on DIY Investor’s Substack. In this article, we will summarize the bulls’ thesis on UNH. UnitedHealth Group Incorporated's share was trading at $294.02 as of January 28th. UNH’s trailing and forward P/E were 15.32 and 16.61 respectively according to Yahoo Finance.

UnitedHealth Group Incorporated operates as a health care company in the United States and internationally. UNH has historically been a highly consistent compounder, delivering roughly 14% EPS CAGR over the past two decades while trading around an 18x P/E multiple, reflecting its predictable business model and strong execution. This long-standing trajectory was disrupted recently by operational and industry-specific challenges that led to a sharp 41% decline in EPS, driving a meaningful reset in both earnings and valuation.

Despite this setback, current analyst expectations point to a gradual but steady recovery, with EPS projected to reach approximately 26.8 by 2028, close to the prior 2024 peak of 27.66. Importantly, UNH benefits from deep and high-quality analyst coverage, with a strong historical track record of forecast accuracy, as revenue misses have typically been below 2% and EPS outcomes have been remarkably consistent over time, with only rare deviations. This reinforces confidence that the current estimates are realistic and grounded in the underlying fundamentals of the business rather than optimism.

The outlook suggests UNH is entering a “valley” period of recovery that could unfold over the next three to five years as earnings normalize and operational issues are worked through. At the current valuation of roughly 15.5x earnings, simply maintaining today’s multiple while achieving the projected earnings recovery could generate approximately 17% annualized returns, translating to about 134% total returns by 2030.

If sentiment improves and the stock re-rates closer to its historical average multiple, potential returns rise further to around 20% CAGR, or roughly 168% cumulative upside over five years. This asymmetric setup helps explain why institutional investors have been active, with significantly more buys and additions than reductions, positioning ahead of a potential multi-year recovery in both earnings power and valuation.

Previously, we covered a bullish thesis on UnitedHealth Group Incorporated (UNH) by FluentInQuality in May 2025, which highlighted Optum-led vertical integration, Medicare Advantage scale, leadership alignment, and healthcare spending tailwinds. UNH’s stock price has been flat since our coverage due to post-drawdown stabilization. DIY Investor shares a similar thesis but emphasizes earnings recovery visibility, analyst accuracy, and valuation-driven upside from re-rating.

UnitedHealth Group Incorporated is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 140 hedge fund portfolios held UNH at the end of the third quarter which was 159 in the previous quarter. While we acknowledge the potential of UNH as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.