UnitedHealth (UNH) shares are rising after Wells Fargo analyst Stephen Baxter issued a positive note, maintaining an “Overweight” rating with a $400 price target, 8% above current levels. UNH stock has surged 50% since August. Baxter’s call comes after UnitedHealth announced scaling back Medicare Advantage, affecting 180,000 beneficiaries.

Despite recent changes, Baxter recommends owning UNH due to its dominance in insurance. Wells Fargo raised estimates for the upcoming quarterly release, citing increased subsidies. UNH’s 2.39% dividend yield adds to its appeal for income-focused investors. Optum, UNH’s care delivery unit, is growing and offsetting near-term pressures.

UnitedHealth shares, while surging, are trading at an attractive valuation of less than 1x sales. Warren Buffett disclosed a sizable position in UNH, showing confidence in its long-term growth. Baxter believes the selloff due to regulatory scrutiny is overdone, creating a good entry point for investors. Wall Street firms are also bullish on UNH’s momentum.

Read more at Yahoo Finance: This Analyst Just Hiked Their UnitedHealth Stock Price Target by 50%. Should You Buy UNH Now?