UnitedHealth Group: Upgrading to Buy as trend should accelerate margin mean reversion

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UnitedHealth Group: Upgrading to Buy as trend should accelerate margin mean reversion

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UnitedHealth Group

Upgrading to Buy as trend should

accelerate margin mean reversion

Rating Change: BUY | PO: 450.00 USD | Price: 376.97 USD

Positive Q2 trend data points set up strong risk/reward 04 June 2026

We are upgrading UNH to Buy as improving medical cost trends and supportive near- Equity

term data points set up a favorable 2Q earnings setup and attractive risk/reward. If

utilization trends continue to moderate, UNH—given its bellwether status—should lead a

Key Changesbroader MCO rally. With UNH’s earnings power 50% higher than its 2026 guidance, low

trend could accelerate the timeline for returning to target, driving upside. We are raising (US$) Previous Current

our estimates and raising our PO to $450 (21.4x our new 2027 ests vs 20.8x our prior Inv. Opinion C-2-7 C-1-7

ests previously). We are now above consensus for 2026/27 estimates. Inv. Rating NEUTRAL BUY

Price Obj. 420.00 450.00

2026E EPS 18.30 18.70Trend data continues to point to upside

Incoming data points make it more difficult to believe that the strong Q1 was purely a 2027E EPS 20.17 21.00

function of weak flu and storms. See our proprietary Trend tracker pointing to April 2028E EPS 22.34 24.00

trend deceleration, company commentary at our conference, or ARDT’s recent comment

on weak April/May utilization. As a result, we are more bullish on MCOs heading into Q2. Kevin Fischbeck, CFA

Research Analyst

BofAS

+1 646 855 5948Low end of target = 5-10% above consensus for 2028 kevin.fischbeck@bofa.com

The company is now guiding to the low end of target margins on all of its businesses by

Joanna Gajuk

2028, which would point to a number north of $26 or 5-10% above consensus. At that Research Analyst