Morgan Stanley Boosts UnitedHealth (UNH) Price Target Ahead of Q3 Earnings—Bullish Signal for Healthcare Giant

Wall Street's optimism surges as Morgan Stanley raises UnitedHealth's price target just days before Q3 earnings drop.

Analysts Bet Big

The upgrade signals confidence in UNH's performance—no surprise given the stock's historical resilience. Institutional money keeps flowing into healthcare despite sector volatility.

Earnings Preview Heat

All eyes on operational metrics and guidance updates. The street expects strong numbers—because when doesn't it? Another quarter of 'beat and raise' would hardly shock anyone.

Healthcare's Crypto?

While crypto volatility makes headlines, steady giants like UnitedHealth keep printing gains—proving sometimes boring beats flashy. Traditional finance jab: At least healthcare stocks don't crash because of a tweet.

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Yet, last week brought a dose of optimism. Shares surged after management projected that ~78% of members will be in 4+ Star Medicare Advantage plans in 2026, up from ~71% this year.

Morgan Stanley analyst Erin Wright, who’s ranked among the top 3% of Street stock experts, called the update “incrementally positive” and pointed out that member retention among the 600,000 individuals affected by 2026 plan changes should come in stronger than the historical one-third exit rate. That view added credibility to the idea that UnitedHealth’s execution may be turning a corner.

At the same time, management is making strategic course corrections. UnitedHealth reaffirmed its commitment to value-based care but stressed that near-term adjustments are needed to preserve long-term sustainability. This includes shifting away from PPOs toward HMOs and acknowledging that optimizing risk-based contracting will take longer than a year. Wright noted that nearer-term challenges in fee-for-service (~15% of revenue) can be mitigated through revenue collection, provider productivity, and improved access.

Encouragingly, regulatory signals have also started to improve. UnitedHealth emphasized that the new administration has been “engaged and collaborative” on Medicare Advantage, giving the industry more of a seat at the table. Meanwhile, the company reported steady progress on RADV audits for 2019 and expressed confidence it can justify all submitted diagnosis codes, though the timing of the government’s completion remains uncertain.

All of this feeds into Wright’s model. If UnitedHealth hits the high end of its long-term Medicare Advantage margin target of 2–4% by 2027, it could add $1.13 to EPS, while Optum Health reaching the low end of its 6–8% target WOULD contribute another $2.98. Taken together, Wright came away “more constructive,” revising her Sum-of-the-Parts analysis and underscoring that “the market has already begun to buy into the turnaround story.”

Reflecting that conviction, Wright assigns UNH an Overweight (i.e., Buy) rating, while raising her price target from $325 to $395, suggesting the stock will gain 13% in the months ahead. (To watch Wright’s track record, click here)

Elsewhere on the Street, UNH shares claim an additional 16 Buys, 2 Holds and 1 Sell, for a Strong Buy consensus rating. However, the $331.67 average price target factors in a one-year slide of ~5%. Given the discrepancy, keep an eye out for either price target hikes or rating downgrades shortly. (See)

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