UnitedHealth Group is on track to continue outperforming on earnings as its corporate strategy shift begins to show signs of paying off, likely giving its shares a nice boost, according to Bank of America. The bank upgraded the health insurer to buy from neutral. It also raised its price target on shares to $450 from $420, implying 19% upside from Wednesday’s close. UnitedHealth group shares are up 3% in premarket trading. “Incoming data points make it more difficult to believe that the strong Q1 was purely a function of weak flu and storms,” analyst Kevin Fischbeck said Thursday in a note to clients. “We maintain a more bullish view in the near term given the potential earnings power that UNH has versus its 2026 guidance.” Shares of UnitedHealth have jumped nearly 26% over the past year as the company has executed its sweeping strategy to improve its margins . Under that plan, the firm has shrunk membership, sold the U.K. arm of its tech-driven Optum healthcare delivery unit and invested in artificial intelligence, among other moves. UnitedHealth’s earnings power is now 50% above its previously stated outlook for 2026 — a fact that should drive upside to shares, according to Bank of America. The company has forecasted that it could hit the low end of its target margins at all of its businesses by 2028, likely putting its earnings per share north of $26, or between 5% and 10% above the Street’s consensus estimate, the analyst said. The growth of Optum Health, which has deepened its push to acquire physician groups and clinics, is one catalyst that could bolster that bottom-line growth, Fischbeck noted. “At that point, UNH is likely still well positioned to grow EPS at least 13-16% for the next few years given that Optum Health … would still have room to improve margins back to the midpoint of target, and UNH will start to pivot to membership growth in the other businesses once it hits its subsegment margin target,” he wrote. Bank of America’s call is in line with consensus on the Street. Of the 30 analysts covering UnitedHealth, 23 have a buy or strong buy on the stock, LSEG data shows.
