RBC Capital has reduced its 12-month price target on UnitedHealth Group Inc. to $361 from $408 while maintaining an Outperform rating on the shares. The analyst who issued the note, Ben Hendrix, described an advance rate proposal underpinning the change as "weaker-than-expected." Despite the cut, the firm reiterated its long-term optimism for the company’s earnings recovery.
Data cited in the report show UnitedHealth shares have declined approximately 46.6% over the past year. At the same time, the stock appears substantially undervalued when measured against a Fair Value assessment, and the company’s PEG ratio of 0.73 points to a valuation that is modest relative to expected earnings growth.
Company management has reaffirmed its long-term adjusted EPS growth target of 13-16%. However, executives appeared to retreat from projecting double-digit EPS growth in the coming year in recent communications, leaving shorter-term expectations more muted than previously anticipated.
For the fourth quarter of 2025, UnitedHealth reported revenue of $113.2 billion, slightly below the consensus forecast of $113.73 billion. Reported earnings per share were $2.11, in line with expectations. The shares trade at a price-to-earnings ratio of 18.3 and provide a dividend yield of 3.13%, offering investors an income component while they await growth normalization.
RBC also expressed broader caution around the managed care sector during the year, indicating that buy-side expectations for 2027 are likely to be revised lower based on investor feedback. Still, the firm said it retains confidence in the company’s ability to return to stronger EPS growth over the long term.
In a separate analyst action, Piper Sandler trimmed its price target on UnitedHealth to $396 from $417 and maintained an Overweight rating. That research note pointed to "persistent funding headwinds" in the Medicare Advantage business as a notable concern, while also stating confidence that UnitedHealth can take steps to protect margins within that segment.
Taken together, the recent analyst adjustments and the company’s quarterly results highlight a mix of near-term challenges and longer-term growth assumptions. Investors will be weighing current valuation metrics including PEG and P/E against evolving expectations for Medicare Advantage funding, management’s renewed longer-range EPS target, and the company’s capacity to manage margin pressure in its core managed care operations.