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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 2025 Earnings Report: A Strong Finish with Promising Outlook

UnitedHealth Group reported adjusted earnings per share (EPS) of $16.35 for 2025, slightly ahead of expectations, with full-year revenues of nearly $448 billion, up 12% from 2024. The company finished the year with a medical care ratio of 89.1% and an operating cost ratio of 13.3%. A $1.6 billion net-of-tax charge was taken, primarily related to Optum, including a true-up for cyber attack-related activities, portfolio optimization, and restructuring actions.

Publication Date: Feb -02

📋 Highlights
  • 2025 Adjusted EPS: $16.35, exceeding expectations, with $448 billion in revenue (12% YoY growth).
  • 2026 EPS Growth Target: At least 8.6% to over $17.75, driven by margin recovery and operational efficiencies.
  • Optum Charge: $1.6 billion net-of-tax for cyber attack costs, restructuring, and portfolio optimization.
  • Margin Expansion: OptumInsight (90bps), OptumHealth (30bps), and OptumRx (20bps) expected in 2026.
  • 2026 Cash Flow: $18 billion operations cash flow (1.1x net income) and $3 billion OptumHealth operating income.

Segment Performance

UnitedHealthcare (UHC) expects 2026 adjusted operating earnings growth of approximately 13%, driven by margin recovery through product repositioning and repricing efforts, with membership contraction of 2.3 million to 2.8 million. Optum expects low to high single-digit adjusted earnings growth across its segments, with margin expansion ranging from 20 to 90 basis points. Specifically, OptumRx expects operating earnings growth from expanding margins by 20 basis points.

Outlook and Guidance

For 2026, the company expects adjusted EPS growth of at least 8.6% to greater than $17.75. UnitedHealth Group reported a 2026 outlook with revenues of approximately $440 billion, net earnings of at least $17.10 per share, and adjusted net earnings of greater than $17.75 per share. The company expects to generate at least $18 billion in cash flow from operations, or about 1.1 times net income.

Valuation and Metrics

With a P/E Ratio of 18.35 and an ROE of 14.76%, the market seems to have priced in a certain level of growth for UnitedHealth Group. The company's Dividend Yield stands at 3.04%, indicating a relatively stable return for investors. The EV/EBITDA ratio of 13.38 suggests that the company's enterprise value is reasonable compared to its earnings before interest, taxes, depreciation, and amortization.

Business Strategy and Initiatives

The company is driving operational disciplines, leveraging technology and artificial intelligence, and renewing its commitment to innovation, agility, and accountability to improve value and drive sustainable growth. UnitedHealth Group also expects to invest nearly $1.5 billion in 2026 in modern intelligent technologies, further enhancing its capabilities.

Medicare Advantage and Medicaid

Regarding Medicare Advantage (MA), the company expects a decline in traditional MA lives in 2026, with a focus on margin improvement. The Medicaid business is expecting rate increases of 6-7% in 2026, still below their medical trend. They do expect some margin contraction due to ongoing rate dislocations and elevated medical trends.

3. NewsRoom

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UnitedHealth: After The Collapse

Feb -10

Source: seekingalpha.com

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Means Investment CO. Inc. Reduces Holdings in UnitedHealth Group Incorporated $UNH

Feb -10

Source: defenseworld.net

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Oppenheimer Asset Management Inc. Acquires 6,421 Shares of UnitedHealth Group Incorporated $UNH

Feb -10

Source: defenseworld.net

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Applied Finance Capital Management LLC Makes New Investment in UnitedHealth Group Incorporated $UNH

Feb -10

Source: defenseworld.net

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GUARDCAP ASSET MANAGEMENT Ltd Lowers Stock Holdings in UnitedHealth Group Incorporated $UNH

Feb -10

Source: defenseworld.net

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AlTi Global Inc. Buys 9,082 Shares of UnitedHealth Group Incorporated $UNH

Feb -10

Source: defenseworld.net

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UnitedHealth Stock: Is the Market Overreacting to Lower-Than-Expected Medicare Rates?

Feb -09

Source: fool.com

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Blume Capital Management Inc. Sells 2,778 Shares of UnitedHealth Group Incorporated $UNH

Feb -09

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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Yield: 6.0

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UnitedHealth

A-Score: 4.3/10

Value: 5.3

Growth: 6.1

Quality: 5.2

Yield: 4.0

Momentum: 0.5

Volatility: 5.0

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Value: 5.3

Growth: 5.2

Quality: 4.1

Yield: 2.0

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A-Score: 3.8/10

Value: 9.5

Growth: 5.6

Quality: 3.3

Yield: 0.0

Momentum: 0.5

Volatility: 4.0

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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

273.22$

Current Price

273.22$

Potential

-0.00%

Expected Cash-Flows