Warren Buffett’s Stamp of Approval Fails to Move Bank of America on UNH Stock—Here’s Why

Oracle of Omaha's blessing? Not enough for BofA analysts.

Buffett's legendary Midas touch meets institutional skepticism as Bank of America holds firm on UnitedHealth Group—proving even the most revered endorsements can't override cold, hard fundamentals in today's market.

While retail investors might chase celebrity picks, the big players stick to their models—because nothing trumps data, not even Berkshire's billions. Sometimes the smartest move is ignoring the so-called smart money.

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After a brutal stretch in 2025 marked by a 50% plunge in the stock due to soaring medical costs, regulatory scrutiny, leadership upheaval, and withdrawn earnings guidance, Buffett’s investment stood out as a vote of confidence that helped spark a rally in UNH shares. More importantly, given Buffett’s oft-repeated MANTRA that his favorite holding period is “forever,” the move carries the weight of a long-term endorsement – particularly in a sector where Berkshire has decades of experience.

Still, not everyone sees Buffett’s buy as a signal for investors to rush in. Bank of America analyst Kevin Fischbeck agrees that it’s a “positive sign,” but cautions that few retail investors share Buffett’s time horizon.

“If you can take a 5-year view, you likely will do well,” Fischbeck notes, “but few investors have that investment horizon, and those that do, still want to see positive returns each year over that time.

That tension between Buffett’s timeless patience and Wall Street’s year-to-year reality is where Fischbeck sees trouble. The analyst argues that UNH’s path higher is unlikely before 2027, pointing to three key uncertainties that could weigh on performance. Any negative outcome, he warns, could delay meaningful upside by a full year.

The first question centers on whether earnings have reached a new baseline. Fischbeck believes they have, stabilizing around $16.80 to $17.00 for the year ahead – modest growth from UNH’s $16.00 forecast for 2025. Achieving that range WOULD mark progress, but hardly the kind of surge investors might hope for.

The second concern is UNH’s Medicare Advantage (MA) membership and the percentage that qualifies for a 5% quality bonus. “Stars performance can make or break MA profitability,” Fischbeck stresses, warning that management missteps could leave UNH at risk of falling below industry norms – a “negative surprise” when CMS data is released in mid-October.

Finally, the largest risk sits on the horizon: a potential 2027 MA coding adjustment. This isn’t just a near-term headwind but a structural challenge that could undo years of gains. Fischbeck estimates the last adjustment cost UNH $16 billion in revenues, and another shift could deal a similarly painful blow.

Amid this “significant uncertainty,” Fischbeck remains cautious, assigning UNH shares a Neutral rating even as he raises his price target from $290 to $325 – implying an 8% upside. (To watch Fischbeck’s track record, click here)

The broader Wall Street view, on the other hand, offers a slightly more upbeat prognosis. With 18 Buys, 2 Holds, and 2 Sells, UNH boasts a Moderate Buy consensus rating. (See)

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