UnitedHealth intra-day move supporting a bottom, says RBC Capital

RBC Capital analyst Ben Hendrix is maintaining an Outperform rating and $525 price target on UnitedHealth (UNH) shares amid intra-day weakness, telling investors that the firm believes Tuesday’s move prices in nearly 200 basis points of incremental Medicare Advantage margin deterioration, which RBC believes is “adequate to call a bottom on shares.” While UnitedHealth is still trying to get a handle on trend amid a leadership transition, the firm still sees less of a ramp back to target margin versus MA peers Humana (HUM) and CVS Health (CVS), says the analyst, adding that the firm is “encouraged” by board chairman and former CEO Stephen Hemsley’s return to the helm upon Andrew Witty’s departure.