UnitedHealth and Elevance battle rising costs, but scale, Optum, and Buffett's backing give UNH the edge in restoring investor trust.
UnitedHealth (UNH) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
UnitedHealth: One Of The Best Risk-To-Reward Ratio On The Market
Warren Buffett's $1.57B position signals confidence, but UNH's rally stems from other factors beyond that. With Buffett or without him, I believe that UNH's rally should keep going. Management is aggressively repricing all business lines for 2026, exiting 600,000+ unprofitable members while shifting to higher-margin products amid elevated medical cost trends. Trading at 15x forward earnings near 2020 levels, UNH mirrors past recovery setups when EPS growth of 11-12% drove significant stock appreciation.
Berkshire's $1.57B stake in UnitedHealth lifted shares by 12%, sparking interest in UNH-heavy healthcare ETFs like IHF, TMED, XLV and MEDI.
The Leverage Shares 2X Long UNH Daily ETF offers leveraged exposure to UnitedHealth's stock via derivative positions with mild basis risk. Despite its recent recovery, we still see UnitedHealth as being undervalued. By using forward P/E and management's guidance, we set a base target of $344 per share. Additional demand could arrive via a herding effect, likely triggered by Warren Buffett's Berkshire Hathaway and Renaissance Technologies revealing positions in UNH via their 13-F filings.
UNH is expanding further into home health with Optum, fueled by a $3.3B Amedisys deal to boost value-based care growth.
UnitedHealth Group has attracted major contrarian investors like Buffett, Burry, and Simons, signaling potential upside after heavy selling pressure. Despite recent turmoil, including leadership changes and regulatory probes, UNH's revenues and premiums continue to grow steadily. Valuation metrics indicate UNH is trading at deep discounts to historical averages, offering a margin of safety and potential 50% upside.
Although UnitedHealth (NYSE: UNH) is navigating a turbulent year, the health insurer continues to reward investors with steady dividend payments.
UnitedHealth Group (UNH) stock is still down 40% YTD but has surged more than +20% this month following reports that Warren Buffett, and other billionaire hedge fund managers have taken a stake in the company.
Bank of America Corp (NYSE:BAC) analysts have repeated their ‘Neutral' rating on UnitedHealth Group Inc (NYSE:UNH, ETR:UNH) after Berkshire Hathaway disclosed a new investment in the health insurer, calling the move a positive signal but not enough to resolve key uncertainties in the near term. “The question is less 'Is there upside?
Warren Buffett's Berkshire Hathaway NYSE: BRK.B just revealed its highly anticipated buys and sells of Q2 2025. Understandably, all the focus is on the Oracle of Omaha's purchase of more than 5 million shares in UnitedHealth Group NYSE: UNH.