Morgan Stanley Bullish on UnitedHealth (UNH) — How High Can This Stock Really Fly?

Morgan Stanley just doubled down on UnitedHealth — but is this healthcare giant actually positioned for liftoff?

The Banking Boost

Wall Street's latest endorsement sends a clear signal: institutional money sees UNH as a defensive play in uncertain markets. The analyst upgrade triggers algorithmic buying patterns that could push the stock toward fresh resistance levels.

The Reality Check

Let's be real — traditional equity analysts chasing momentum is about as surprising as a banker taking lunch at a steakhouse. While the upgrade provides short-term momentum, UnitedHealth faces the same regulatory headwinds and margin compression plaguing the entire healthcare sector.

The Bottom Line

Morgan Stanley's endorsement gives UNH institutional credibility, but smart money knows healthcare stocks move at the mercy of policy changes — not analyst upgrades. This isn't crypto — you can't just HODL through regulatory overhaul.

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Thus was case this week, as a recent 8-K regulatory filing revealed that the company is on track to have 78% of its Medicare Advantage (MA) members enrolled in plans with a quality rating of at least four stars next year. While that tracks with the company’s average from the past few years, and is consistent with its own objectives, UNH’s failure to meet its own benchmarks earlier this year has caused the its share price to plummet.

While the 78% figure WOULD represent a healthy improvement from this year’s 71%, the market’s positive response – UNH is up 10% since the news came out – was more a reaction to the hope that the company is starting to head back in the right direction.

That’s the view that Morgan Stanley analyst Erin Wright has formed after an extensive set of one-on-one meetings with the embattled healthcare giant’s leadership.

“We are incrementally positive following discussions with UNH mgmt where it had conviction in the turnaround, driven by MA & Optum Health profit improvement,” explains the 5-star analyst, who is among the top 3% of TipRanks’ stock pros.

Wright notes that the stars seem to be aligning for UNH with its MA numbers, as its pre-tax margin is expected to grow from 2% to 2.5% in 2025 to 2.5% to 3% in the year ahead. The analyst was also pleased by the 78% projections for 2026, which the analyst describes “as the first checked box of the MA margin turnaround story.”

Among those with whom Wright had the opportunity to converse was CEO Stephen Hemsley, and Wright came away impressed. The analyst believes that the new company head has been taking a “prudent stance” when it comes to forward-looking statements, and she is onboard with this approach.

“This fits the objective of getting back to the beat-and-raise company UNH once was,” adds Wright, who assigns UNH an Overweight (i.e. Buy) rating.

However, Wright’s $325 price target may need a second look, as it currently points to a 6% downside from present levels. (To watch Erin Wright’s track record, click here)

Her stance isn’t far off from the broader Street view. With 17 Buys, 2 Holds, and 1 Sell, UNH carries a Strong Buy consensus rating, while the 12-month average price target of $327.78 lands almost in line with Wright’s projection. (See)

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