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1. Company Snapshot

1.a. Company Description

UnitedHealth Group Incorporated operates as a diversified health care company in the United States.It operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health care coverage and well-being services to individuals age 50 and older addressing their needs for preventive and acute health care services, as well as services dealing with chronic disease and other specialized issues for older individuals; Medicaid plans, children's health insurance and health care programs; health and dental benefits; and hospital and clinical services.The OptumHealth segment provides access to networks of care provider specialists, health management services, care delivery, consumer engagement, and financial services.


This segment serves individuals directly through care delivery systems, employers, payers, and government entities.The OptumInsight segment offers software and information products, advisory consulting arrangements, and managed services outsourcing contracts to hospital systems, physicians, health plans, governments, life sciences companies, and other organizations.The OptumRx segment provides pharmacy care services and programs, including retail network contracting, home delivery, specialty and compounding pharmacy, and purchasing and clinical capabilities, as well as develops programs in the areas of step therapy, formulary management, drug adherence, and disease/drug therapy management.


UnitedHealth Group Incorporated was incorporated in 1977 and is based in Minnetonka, Minnesota.

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1.b. Last Insights on UNH

UnitedHealth Group's recent performance is driven by several positive factors. The company's reaffirmation of its FY25 EPS guidance (Source: September 9, 2025) provided a strong signal to investors, easing concerns about its ability to meet Medicare Advantage enrollment goals. Additionally, management's aggressive repricing of business lines for 2026 and exit of unprofitable members are expected to drive growth. A robust balance sheet, healthy dividend coverage, and potential for substantial share buybacks (implying a reduction in outstanding shares) also support the stock.

1.c. Company Highlights

2. UnitedHealth Group's Q3 Earnings: A Strong Beat with Revenue Growth and Margin Improvement

UnitedHealth Group reported adjusted earnings per share of $2.92, slightly ahead of expectations of $2.8, with revenues over $113 billion, reflecting 12% year-over-year growth. The medical care ratio was 89.9%, trending towards the lower end of projections. The company's strong financial performance was driven by its diversified business model, with total domestic membership of over 50 million. The debt-to-capital ratio remained stable at 44.1% in the third quarter, with a target to trend closer to 40% in the second half of 2026.

Publication Date: Oct -29

📋 Highlights
  • 2026 Earnings Growth Target: UnitedHealth Group expects solid operating earnings growth in 2026, driven by margin improvements in UnitedHealthcare ($2.92 adjusted EPS reported) and Optum Health’s 6–8% margin target.
  • Medicare Headwinds: Faces $50 billion in industry-wide Medicare cuts by 2026, alongside Medicaid funding pressures, but remains confident in operational rigor to offset challenges.
  • Membership Shifts: Medicare Advantage membership projects a 1 million member contraction in 2026 due to exiting products and pricing pressures, while total domestic membership exceeds 50 million.
  • Capital Deployment Strategy: Debt-to-capital ratio at 44.1% in Q3, targeting 40% by H2 2026, with plans to reinstate buybacks and strategic acquisitions to deploy $16 billion in annual operating cash flow.
  • Optum Health Refocus: Prioritizes value-based care (6–8% margin target), exiting underperforming contracts, and AI investments, with slower progress expected in 2026 but sustainable growth anticipated by 2027.

Business Segment Performance

UnitedHealthcare's medical cost trends remain historically high but consistent with expectations. The business has repriced the vast majority of its risk businesses, including Medicare Advantage, and expects margin growth in 2026. Medicare Advantage membership is expected to contract by approximately 1 million members in 2026, driven by planned actions and competitive market dynamics. In Optum Health, the company is refocusing on its original mission around value-based care, with efforts to restore the business to its original intent.

Outlook and Guidance

For 2026, UnitedHealth Group expects to make meaningful progress in its commercial business, with a long-term target margin range of 7% to 9%. The company anticipates a contraction of approximately 1 million members in Medicare Advantage, driven by exiting products and pricing pressures. Analysts estimate next year's revenue growth at 3.7%. The company will provide formal guidance for 2026 in January.

Valuation and Dividend Yield

With a P/E Ratio of 18.99 and a Dividend Yield of 2.34%, UnitedHealth Group's valuation appears reasonable, considering its strong track record of execution and growth prospects. The company's ROE of 18.32% and ROIC of 10.51% indicate a strong ability to generate returns on equity and invested capital. The Net Debt / EBITDA ratio of 1.62 suggests a manageable debt burden.

Capital Deployment and Shareholder Returns

The company is resuming its capital and liquidity framework, targeting a debt-to-capital ratio around 40% and interest coverage ratios in line with historic levels. UnitedHealth Group expects to return to its normal capital deployment plan, prioritizing debt repayment, buyback, and strategic acquisition. The company has a history of returning capital to shareholders through dividends and share buybacks.

3. NewsRoom

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UnitedHealth: Time To Buy This Healthcare Fortress

Dec -04

Source: seekingalpha.com

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First Look: Insurers, Auto Rules, AI and Fed Jitters

Dec -04

Source: gurufocus.com

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Why UnitedHealth Stock Popped on Wednesday

Dec -03

Source: fool.com

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Up 37% Since August, Is It Safe to Buy UnitedHealth Group Stock Again?

Dec -03

Source: fool.com

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Is UnitedHealth's Valuation Dip & Divestment Diet a Real Buy Window?

Dec -02

Source: zacks.com

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UnitedHealth Stock Analysis: Buy or Sell?

Dec -02

Source: fool.com

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Is UnitedHealth an Undervalued Stock to Buy Now?

Dec -02

Source: fool.com

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Brandes Investment Partners LP Increases Stake in UnitedHealth Group Incorporated $UNH

Dec -02

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.60%)

6. Segments

United Healthcare

Expected Growth: 6.0%

The growth is slightly below the global hypothesis due to potential regulatory changes and market saturation. However, the segment's broad customer base and the essential nature of its services will continue to drive growth.

Optum - Optum Health

Expected Growth: 7.0%

The growth is expected to be higher than the global average due to the increasing focus on preventive care and the segment's capabilities in population health management. The trend towards value-based care is likely to drive demand for Optum Health's services.

Optum - Optum Rx

Expected Growth: 6.5%

The segment's growth is in line with the global hypothesis, driven by the steady demand for pharmacy services. The increasing prevalence of chronic conditions and an aging population will continue to drive the need for pharmacy care services.

Optum - Optum Insight

Expected Growth: 8.0%

The growth is expected to be higher than the global average due to the increasing adoption of digital technologies in healthcare and the need for data-driven insights. Optum Insight's capabilities in data analytics and advisory services are likely to drive growth in this segment.

Eliminations

Expected Growth: 0.0%

The 0.0% growth in eliminations from UnitedHealth Group Incorporated suggests that there are no significant changes in inter-segment transactions or consolidations. This stability implies that the company's business segments are operating independently with minimal internal adjustments, indicating a steady and predictable financial performance.

7. Detailed Products

UnitedHealthcare

UnitedHealthcare is a health care coverage and benefits services company that provides health care coverage to individuals, families, and businesses.

Optum

Optum is a health services company that provides data, analytics, and consulting services to help health care organizations improve their operations and deliver better care.

UnitedHealth Group's Medicare and Retirement

UnitedHealth Group's Medicare and Retirement segment provides health and well-being services tailored to the needs of seniors and individuals with disabilities.

UnitedHealth Group's Health Services

UnitedHealth Group's Health Services segment provides health management services, including disease management, disability management, and health coaching.

UnitedHealth Group's Financial Services

UnitedHealth Group's Financial Services segment provides financial services, including health savings accounts, flexible spending accounts, and stop-loss insurance.

8. UnitedHealth Group Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

UnitedHealth Group Incorporated faces a moderate threat from substitutes as there are alternative health insurance providers and healthcare services, but switching costs and established networks can retain customers.

Bargaining Power Of Customers

The bargaining power of customers in the health insurance industry is relatively low due to the complex nature of healthcare services and the essential need for insurance coverage, giving UnitedHealth Group Incorporated some pricing power.

Bargaining Power Of Suppliers

The bargaining power of suppliers in the health insurance industry is relatively low as UnitedHealth Group Incorporated has a large network of healthcare providers and can negotiate favorable terms due to its scale.

Threat Of New Entrants

The threat of new entrants in the health insurance industry is relatively low due to high barriers to entry, including regulatory requirements, significant capital needs, and established brand loyalty.

Intensity Of Rivalry

The intensity of rivalry in the health insurance industry is high, with several major players competing for market share, including Anthem, Aetna, and Cigna, leading to competitive pricing and service offerings.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 45.35%
Debt Cost 4.29%
Equity Weight 54.65%
Equity Cost 7.27%
WACC 5.92%
Leverage 83.00%

11. Quality Control: UnitedHealth Group Incorporated passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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AbbVie

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Growth: 4.7

Quality: 7.5

Yield: 7.0

Momentum: 8.5

Volatility: 9.0

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CVS Health

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Yield: 6.0

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Growth: 5.7

Quality: 6.8

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UnitedHealth

A-Score: 4.3/10

Value: 4.9

Growth: 6.1

Quality: 5.1

Yield: 4.0

Momentum: 0.5

Volatility: 5.0

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Value: 6.0

Growth: 5.3

Quality: 5.2

Yield: 1.0

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Centene

A-Score: 3.6/10

Value: 9.3

Growth: 5.7

Quality: 3.3

Yield: 0.0

Momentum: 0.0

Volatility: 3.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

330.91$

Current Price

330.91$

Potential

-0.00%

Expected Cash-Flows