Investing.com -- Deutsche Bank cut its rating on UnitedHealth Group to Hold from Buy, saying the stock’s valuation now reflects its expected earnings rebound. The brokerage lifted its price target to $333 from $275, implying a 9% downside from current levels.
Analyst George Hill said UnitedHealth’s shares have already priced in a multi-year “beat and raise” story, leaving little room for further upside despite improving margin trends.
The stock trades at about 21 times 2026 earnings, a premium Deutsche Bank said is “near-peak” given the uncertainty in the earnings path.
The firm expects moderate earnings growth in 2026, accelerating to double digits in 2027 as margins recover across all businesses.
But Deutsche Bank said visibility remains limited around a turnaround at Optum Health, the company’s medical services arm, which has been the weakest performer. It also warned that earnings at Optum Insight and Optum Rx could slow next year, while Medicaid may not have reached its trough in 2026.
“We are not convinced 2026 will be the earnings trough for Medicaid, and we expect Optum Insight and Optum Rx to see earnings deceleration in 2026,” analysts at DB said.
“Rich valuation combined with near- to medium-term earnings uncertainty forces us to the sideline.”
The higher price target was due to confidence that profits have bottomed, but the bank said recent gains have outpaced fundamentals.
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UnitedHealth downgraded as beat and raise already priced in
Published 1 week ago
Oct 29, 2025 at 2:28 PM
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