UBS Sees 36% Potential Rise in UnitedHealth Shares Amid Strategic Reset

UnitedHealth Group's shares experienced a modest increase of 1.2%, reaching $240 on Monday, yet they are down by 52% for the year so far. Despite this decline, UBS has reaffirmed its 'Buy' rating and set a target price of $330, indicating a potential upside of nearly 37% from current levels. Following a meeting with UnitedHealth executives during an investor luncheon, UBS highlighted the company's new 'return-to-basics' approach, emphasizing stabilization of core operations before pursuing aggressive growth strategies. The company is reviewing all divisions thoroughly and slowing expansion efforts to strengthen its foundational performance. UBS anticipates the benefits segment to lead the recovery, with OptumHealth improving as UnitedHealthcare stabilizes and OptumRx maintaining strong results. Some divisions, such as OptumInsight, may take longer to rebound, prompting management to focus on tighter oversight and targeted investments. Furthermore, UBS's optimistic outlook is supported by UnitedHealth’s focus on artificial intelligence initiatives and brand enhancement as part of a strategic, long-term plan. While some improvements may take time, UBS's positive outlook aligns with...