UnitedHealth stock jumped over 3% in premarket trading after a 12% rally last Friday. BofA Securities raised its price target on UnitedHealth Group to $325.00 from $290.00 on Monday, while maintaining a Neutral rating on the stock.
The price target increase reflects better peer multiples, which BofA now calculates at 17.1x compared to 15.3x previously.
BofA noted that Berkshire Hathaway (NYSE:BRKa)’s investment in UnitedHealth Group is a positive sign, reinforcing the view that UNH’s earnings are currently depressed and could offer good returns over a five-year horizon.
Despite the long-term positive outlook, BofA remains Neutral on the stock until it gets more clarity on three key questions that could determine whether the company faces "12 more months of underperformance."
The firm sees potential upside for UnitedHealth in 2027, which could also lead to multiple expansion, but maintains its cautious stance until more information becomes available.
In other recent news, UnitedHealth Group has announced a quarterly cash dividend of $2.21 per share, set to be paid on September 23, 2025, to shareholders of record as of September 15, 2025. This announcement comes amid significant investment interest, as Warren Buffett’s Berkshire Hathaway disclosed a substantial stake in the company, purchasing 5 million shares during the second quarter. Other notable investors, including David Tepper’s Appaloosa Management LP, have also increased their positions in UnitedHealth.
Analyst firms have shown continued confidence in UnitedHealth, with Piper Sandler maintaining its Overweight rating and a price target of $280. UBS has reiterated its Buy rating, setting a price target of $330, after discussions with the company’s management. UnitedHealth has emphasized a "return to basics approach" to solidify its operational foundations before pursuing further growth. This strategy was highlighted during investor meetings attended by key company executives. These developments reflect ongoing interest and strategic planning within UnitedHealth Group.