UnitedHealth price target lowered to $374 from $563 at Morgan Stanley

Morgan Stanley analyst Erin Wright lowered the firm’s price target on UnitedHealth (UNH) to $374 from $563 and keeps an Overweight rating on the shares. Another EPS recalibration was “broadly not anticipated and clearly disappointing on the heels of a rebase in April,” but following discussions with the company, the firm feels “somewhat more confident” that the guidance pull is predominantly driven by incremental cost pressure in the Medicare Advantage book which accelerated in April, as opposed to potentially longer term or more structural issues across OptumHealth, the analyst tells investors. The firm is “hopeful” new management can help reset the trajectory, even though it will “admittedly take time,” the analyst added.