UnitedHealth Shares Slide Over 5% After Baird Downgrade And Price Target Cut

UnitedHealth Group Inc. (NYSE:UNH) shares are trading lower Thursday, after Baird downgraded the stock to Underperform and slashed its price target from $312 to $198.

What To Know: The downgrade follows ongoing concerns around the company’s Optum Health segment and broader headwinds across nearly all of UnitedHealth's business lines, according to CNBC.

Baird analyst Michael Ha cited serious doubts about the long-term profitability of Optum Health's value-based care model. In a note published Wednesday, Ha pointed to the company's second-quarter results, which revealed a significant margin reset, with long-term value-based care margins reduced to 5%. The firm's internal modeling indicated an implied headwind of nearly 20% over three years under CMS's v28 changes to risk adjustment. Ha wrote that without meaningful offsets or mitigation strategies, and with re-coding back to pre-v28 levels considered unrealistic, he has little confidence in UnitedHealth's ability to maintain even 1% value-based care margins by 2026.

The company's second-quarter earnings report earlier this week intensified concerns. While revenue slightly beat expectations, earnings missed, and the full-year forecast came in well below Wall Street estimates. The result triggered a sell-off that has extended through the week. Shares are now down roughly 51% over the past six months and 47% year-to-date, drastically underperforming the broader market, which is up more than 5% and 8% over the same periods, respectively.

Baird also flagged new concerns across UnitedHealth's other business units, including Medicare Advantage, Community Group/HIX, Medicaid and Optum Insight. Even segments that were previously seen as margin drivers, like OptumInsight and OptumRx, are now viewed as facing greater operational challenges heading into 2026.

Despite the downgrade, broader sentiment among analysts remains largely positive. According to LSEG data, 19 out of 28 analysts covering the stock still rate it as a buy or strong buy. The average price target sits at approximately $346, suggesting more than 30% upside from current levels. However, Thursday's steep drop signals investors are reacting more strongly to Baird's lowered expectations and growing skepticism about the company's ability to stabilize margins and earnings over the next year.

UNH Price Action: UnitedHealth shares were down 6.54% at $248.66 at the time of writing, according to Benzinga Pro.

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