RBC Capital Sees Long-Term Growth Intact at UnitedHealth (UNH) Despite CMS Uncertainty

UnitedHealth Group Incorporated (NYSE:UNH) is included among the 14 High Yield Dividend Stocks with Sustainable Payouts.

On January 28, RBC Capital cut its price recommendation on UnitedHealth Group Incorporated (NYSE:UNH) to $361 from $408. However, it kept an Outperform rating on the stock. The firm said it was encouraged that management has recommitted to a long-term adjusted EPS growth target of 13%–16%. At the same time, analysts are now assuming a steeper earnings ramp. Uncertainty around the CMS advance rate notice remains a key issue. After the weaker-than-expected proposal, UnitedHealth’s leadership also appeared to step back from targeting double-digit EPS growth next year, the analyst noted in a research report.

The stock sold off sharply, falling nearly 17% between January 26 and January 29. UnitedHealth’s 2026 revenue guidance did come in below Wall Street expectations, but that alone does not explain the move. The larger driver was a proposal from the Centers for Medicare & Medicaid Services to raise 2027 Medicare Advantage rates by just 0.09%, roughly in line with 2026 levels. Most analysts had been looking for an increase closer to 4% to 6%.

The CMS announcement rippled across the sector. Several health insurance stocks dropped on the news. UnitedHealth is likely to feel the impact more than most. Its UnitedHealthcare division is the largest Medicare insurer in the US by membership, which leaves the company more exposed to changes in Medicare Advantage pricing.

UnitedHealth Group Incorporated (NYSE:UNH) is a healthcare and well-being company with multiple business lines. Its operations include Optum Health, Optum Insight, Optum Rx, and UnitedHealthcare. The UnitedHealthcare segment spans Employer & Individual, Medicare & Retirement, and Community & State coverage.

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