UnitedHealth (UNH) stock’s rating has been downgraded by Deutsche Bank analyst George Hill to Hold from Buy despite the company’s upbeat third-quarter earnings report, released yesterday. Even though the Top analyst raised the price target to $333 (7.6% downside) from $275, he expressed caution about the stock’s valuation and earnings outlook. UNH stock was down about 2% during Wednesday’s trading session.
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Analyst Sees UNH Stock as Too Expensive
During the Q3 earnings call, the company stated that it anticipates moderate earnings growth in 2026 and a return to double-digit EPS growth in 2027, as margins recover across its business lines. However, Hill believes the stock has already priced in most of the expected earnings recovery for 2027 and 2028, leaving little room for upside.
Further, Hill noted that UNH stock is trading at high valuation multiples, which are 21 times his revised 2026 EPS estimate, 19x for 2027, and 16.5x for 2028. Also, the analyst is cautious as his earnings estimates for 2027 and 2028 are lower than Wall Street’s.
In addition, Hill raised concerns about the turnaround at Optum Health, which has seen the most margin erosion, and is not convinced Medicaid earnings will bottom in 2026. Moreover, he expects Optum Insight and Optum Rx to witness slower growth next year.
Overall, with limited visibility into key business units and medium-term uncertainty, the analyst is stepping to the sidelines.
Is UNH a Good Buy Right Now?
Turning to Wall Street, UNH stock has a Moderate Buy consensus rating based on 17 Buys, three Holds, and two Sells assigned in the last three months. At $372.18, the average UnitedHealth stock price target implies a 3.28% upside potential.
