UnitedHealth: Should You Buy This Falling Knife?

Victor Dergunov
Investing Group Leader
(10min)

Summary

  • Despite massive recent weakness and uncertainty, I believe UNH is a "reluctant" buy due to its cash flow, dividend, and systemic importance.
  • UNH faces unprecedented selling pressure, CEO resignation, DOJ investigation, and negative public sentiment, making it a high-risk/reward investment currently.
  • The valuation is compelling: UNH trades at an 11-13x forward earnings, with a reasonable expectation of earnings recovery and growth returning in 2026.
  • My base-case 12-month price target is $400-450, offering 40-60% upside, but investors must be prepared for continued volatility and downside risk.

Skyscrapers in Downtown Hartford, Connecticut (<a href='https://seekingalpha.com/symbol/USA' title='Liberty All-Star Equity Fund'>USA</a>)

John M. Chase/iStock Unreleased via Getty Images

I'm quite familiar with UnitedHealth Group Incorporated (NYSE:UNH) "UNH" as the healthcare giant towers over the skyline of my home state, Connecticut. I also have a confession to make. I recently purchased UnitedHealth's stock

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This article was written by

Victor Dergunov
51.75K Followers

Hi, I’m Victor Dergunov, MBA, and I’ve been an active investor for over 20 years. My passion for investing started early, and I’ve spent two decades honing strategies that consistently deliver results. Whether it's tech giants like Apple and Tesla or opportunities in commodities and crypto, I provide diversified insights to help you succeed. Join me, and let’s take your investing to the next level.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of UNH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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