UnitedHealth Group, a healthcare giant, has seen its stock drop by over 44% in 2025 due to rising costs in Medicare Advantage, CEO exit, and federal scrutiny. Despite this, Bernstein is bullish, expecting earnings to double by 2029 with a CAGR of 19%. The stock is undervalued, trading at a 40% discount.

UNH’s stock underperformance is driven by Medicare costs, earnings miss, probes, cyberattack, and CEO resignation. Bernstein sees UNH as a buy opportunity with a forward P/E of 13.95x. The stock offers a solid income yield of 3.13% and is set to report Q2 earnings on July 29.

Q1 2025 results showed a revenue increase to $109.5 billion, but an earnings miss due to higher medical costs. CEO acknowledged performance issues and steps to address them. Free cash flow remains strong at $4.6 billion, while the company returned $5 billion to shareholders. Analysts expect EPS to rebound by 2026.

Despite recent challenges, UNH is seen as a contrarian value buy with potential for earnings rebound. Wall Street agrees, with a consensus “Moderate Buy” rating and an average price target of $358.29, indicating a 25.6% upside. Analysts predict a doubling of EPS from 2025 to 2029 as margins normalize.

Read more at Yahoo Finance: UNH Stock is Down 44% in 2025, But This Analyst Still Thinks UnitedHealth is a Top Q2 Earnings Pick