Bernstein Raises UnitedHealth Target to $492 on Signs of Medicare Advantage Recovery

Overview

• The upgrade, issued May 27, lifted Bernstein’s price target from $444 to $492 and kept an Outperform rating, implying about 27–30% upside from current prices.
• Bernstein said it now expects roughly a 16% adjusted earnings-per-share compound annual growth rate as Medicare Advantage margins normalize, and it raised its target P/E to 21.5x.
• Market pricing has already shifted, with UNH’s forward P/E rising from about 18.7x to 19.6x this year and fourteen analysts increasing earnings forecasts.
• UnitedHealth is changing operations to make costs more predictable by moving Optum Rx to a fee-based pharmacy benefit manager model and cutting prior-authorizations for roughly 30% of services.
• Regulatory risk remains significant because a federal enrollment pause for some home-health and hospice providers and ongoing fraud and industry reviews could slow the timing of a full recovery.