Wolfe Research Keeps Outperform Rating on UnitedHealth (UNH), Cuts PT

On May 20, Wolfe Research lowered the price target on UnitedHealth Group Incorporated (NYSE:UNH) from $501 to $390, keeping an Outperform rating on the stock.

Analyst Justin Lake cut the price target after the company announced guidance suspension. During the Q1 FY2025 earnings call, the company had revised its full-year earnings outlook to between $24.65 and $25.15, whereas its adjusted earnings forecast was around $26 to $26.50.

After missing both earnings and revenue estimates in Q1 2025, impacted by poor performance in Medicare, the company has suspended guidance for the year. The Medicare Advantage segment suffered due to the utilization trends doubling compared to expectations.

Lake, however, remains optimistic about UNH’s Medicare Advantage segment and expects it to recover margins in its $190 billion segment. The Chairman of UNH and newly appointed CEO, Stephen Hemsley, brings some optimism to the company. Hemsley created UnitedHealth’s Optum Health, and Lake sees signs of stabilization and improvement at Optum Health moving forward.

Hemlsey’s target is to return to 13-16% growth in the long term. UnitedHealth Group Incorporated (NYSE:UNH) expects to return to growth in 2026.

While we acknowledge the potential of UNH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than UNH and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure. None.