UBS upgraded UnitedHealth to Buy from Neutral with a price target of $640, up from $520. UnitedHealth entered 2023 trading at 20-21-tiimes forward year earnings, but several issues arose in Q1 that have pressured valuations for the company and the rest of the managed care group this year, the analyst tells investors in a research note. The firm believes the “strong” Q3 release from UnitedHealth is a “clearing event that should pave the way for improved valuation for the stock.” Management offered a preliminary 2024 earnings outlook that is in line to better than expectations, and UnitedHealth affirmed that, with two quarters since the initial expression of concern, Medicare utilization trends have been stable at levels reflected in current estimates, says UBS.
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