Bernstein Cuts Price Target on UnitedHealth Group to $337, Keeps "Outperform" Rating

Bernstein reduced UnitedHealth Group's (UNH) price target to $337 from $377, while maintaining an "Outperform" rating. The firm reduced its estimates after Q2 2025 to reflect lower earnings power in 2025, but remains optimistic about the company's growth. UNH updated its 2025 outlook, expecting revenues of $445.5 billion - $448.0 billion and net earnings of at least $14.65 per share. The company anticipates returning to earnings growth in 2026.

UnitedHealth Group Incorporated (UNH) has faced a significant adjustment to its financial outlook, as Bernstein Research has reduced its price target for the healthcare giant. The firm lowered its price target from $377 to $337 while maintaining an "Outperform" rating. This decision follows Bernstein's reassessment of UNH's earnings power in 2025, which has been impacted by adverse medical cost trends and other headwinds.

Bernstein's decision to revise the price target is based on updated earnings estimates following UnitedHealth's Q2 2025 results. The company reported adjusted earnings per share of $4.08, down from the prior year, and revised its full-year guidance to at least $16 per share. UnitedHealth's CFO, John Rex, attributed the lower earnings to elevated medical costs, exchange-related headwinds, and slower growth in its OptumHealth division [2].

Despite the challenging environment, UnitedHealth remains optimistic about its long-term prospects. The company expects to return to earnings growth in 2026, driven by renewed focus on pricing, operational discipline, and long-term investments in AI and modernization. UnitedHealth also anticipates revenues of $445.5 billion to $448.0 billion and net earnings of at least $14.65 per share for 2025 [2].

The reduced price target reflects Bernstein's view that UnitedHealth's near-term earnings power may be lower than previously anticipated. However, the firm remains confident in the company's long-term growth prospects and the potential for earnings recovery in 2026 and beyond.

References:
[1] https://seekingalpha.com/article/4808332-unitedhealth-the-more-it-drops-the-more-ill-buy
[2] https://www.cfo.com/news/july-earnings-update-boeing-unitedhealth-starbucks-coca-cola-blackrock-/756977/