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UnitedHealth Group (UNH) endured a brutal year, ranking among the worst-performing large-cap stocks as shares slid roughly 33%.
The selloff was driven by a perfect storm of negativity: allegations tied to billing practices, unexpectedly high medical costs—especially within Medicare Advantage—disappointing earnings, weak forward guidance, and even an abrupt CEO departure.
Adding fuel to the fire, a U.S. Senate committee scrutinized the company’s Medicare risk-adjustment practices, while separate reports highlighted a renewed federal probe involving nursing home referrals.
In short, sentiment collapsed—and confidence followed.
But much of this damage now appears to be priced into the stock.
And despite the headlines, analysts remain firmly bullish, arguing that the stock is positioned for stabilization and recovery.
The Bull Case Is Taking Shape
First, UnitedHealth’s confidence in its long-term outlook is reflected in its dividend. The company just paid a quarterly dividend of $2.21 per share, extending its streak to 24 consecutive years of dividend payments.
Second, analysts believe the worst may be behind it.
Evercore ISI’s Elizabeth Anderson maintains an outperform rating with a $400 price target, noting that 2026 should mark a year of stabilization. As margins normalize and execution improves, she sees a clear path to recovery.
RBC Capital reiterated an outperform rating with a $408 target, citing confidence in UnitedHealth’s strategic execution. Bernstein analysts are even more constructive, assigning a $444 price target based on what they view as an increasingly attractive valuation.
Berkshire Hathaway quietly purchased more than five million shares—roughly $1.6 billion worth—in the second quarter, a strong vote of confidence from Warren Buffett’s camp.
Eyes on Earnings
Heading into fourth-quarter earnings on January 27, analysts are cautiously optimistic. While expectations have been reset lower—adjusted EPS is projected at $2.09 versus $6.81 last year—this reset may ultimately clear the runway for future growth.
For fiscal 2025, adjusted EPS is expected to come in at $16.30, down from $27.66 in 2024. But the forward view is improving, with analysts projecting roughly 8% earnings growth in fiscal 2026 to $17.60 per share.
For patient investors willing to look past the noise, UnitedHealth’s worst year may give way to a solid opportunity.
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Written by Ian Cooper