Raymond James Adds UnitedHealth Group to Favorite Stocks List
Raymond James has added UnitedHealth Group (NYSE:) to its list of current favorite stocks, citing improving fundamentals and an attractive valuation. The firm noted that the stock has underperformed the S&P 500 and is now trading at a significant discount, around 22% or 4.8 times below its historical averages.
The analysts expressed confidence in UnitedHealth’s potential for a turnaround in 2025, driven by better fundamentals and expected positive headlines. They highlighted the company’s Medicare Advantage (MA) program as a catalyst, with an advanced rate notice anticipated in late January. While the Trump administration’s policies on MA remain uncertain, analysts believe it is “very unlikely to be more hostile than his predecessor’s.”
Another factor supporting the firm’s bullish outlook is UnitedHealth’s conservative forecast for 2025, particularly regarding medical loss ratio (MLR) assumptions, which have been increased by 150 basis points compared to FY24 guidance. The company typically outperforms its initial guidance ranges by ~4% on average, excluding last year, which had unusual circumstances (MLR pressure/CHNG cyberattack).
The firm sees easing year-over-year comparisons and market anticipation of 2026 growth as potential tailwinds for the stock. “We think the stock is poised for a gathering strength through the year,” the analysts concluded.
