Shares of healthcare company UnitedHealth Group (NYSE:UNH) fell today despite an analyst upgrade. Indeed, HSBC changed its rating on the stock from Sell to Hold. The analysts seem to believe that the company’s issues—including a cyberattack on its Change unit, a cut in Medicare Advantage rates, ongoing anti-trust investigations, and heightened scrutiny over the Pharmacy Benefit Manager (PBM) sector—are priced in.
Nevertheless, the bank lowered the price target from $470 to $460 per share to adjust for these headwinds. Its calculations include a medical loss ratio that’s 0.5% higher than the consensus for the first quarter and lower growth and margin forecasts for Optum Insights. Still, HSBC acknowledges UnitedHealth’s strong strategy for capital deployment and its potential for growth through mergers and acquisitions.
Is UNH a Good Buy Right Now?
Overall, analysts have a Strong Buy consensus rating on UNH stock based on 15 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. After an 8% decline in its share price over the past year, the average UNH price target of $591.29 per share implies 30.21% upside potential.
