Strongest bullish signal for UnitedHealth Group's stock observed in more than fourteen years.
UnitedHealth Group (NYSE: UNH) has plummeted amidst a wave of challenges, triggering a deeply oversold technical signal not seen since the 2008 financial crisis. As of now, the stock is trading at around $296-$305, a significant drop from earlier this year.
The Relative Strength Index (RSI) on both the weekly and monthly charts stands at 27.78, a level last seen during the 2008 financial crisis. This oversold reading often signals a stock is due for a rebound, as evidenced by UNH's previous recovery after a similar RSI level.
Recent setbacks include the abrupt resignation of CEO Andrew Witty on May 13, followed by the company's suspension of its 2025 financial outlook. The decision was attributed to soaring medical costs, especially in Medicare Advantage plans, and an unexpected surge in care demand. To address these issues, former CEO Stephen Hemsley has returned to the helm, expressing disappointment in recent performance but expressing continued confidence in the long-term growth of the company.
The stock's woes were further exacerbated on May 15 with reports from the Wall Street Journal of a DOJ criminal investigation into UnitedHealth's Medicare Advantage billing practices. However, a notable shift occurred when insiders bought a substantial number of shares, boosting investor confidence amidst waning sentiment around the American healthcare company.
Despite these developments, analysts remain cautiously optimistic about UNH's recovery and future growth. For instance, Truist has cut UNH's price target from $580 to $360 but maintained a "Buy" rating, citing suspended guidance, leadership changes, and rising Medicare Advantage costs. Similarly, TD Cowen downgraded UNH to "Hold," cutting its target from $520 to $308, attributing the decision to coding pressures, regulatory changes, margin struggles, and the DOJ probe.
Current price targets for 2025 range from approximately $441.87, as reported by MarketBeat, to CoinPriceForecast's projection of a price increase to about $350 by mid-2025, eventually reaching $400 by the end of 2025 and continuing to $512-$833 in the 2026-2030 period.
In conclusion, UnitedHealth's stock has experienced a sharp decline due to regulatory and leadership challenges but remains a stock to watch for potential relief and recovery. Analysts predict a bullish outlook, with price targets mostly in the $400+ range for 2025. The outlook balances the risks from ongoing investigations against the company's earnings power and growth trajectory, making UnitedHealth a stock worth monitoring for a possible rebound in both the short and long term.
Investors may see an opportunity in the stock-market, given the oversold technical signal of UnitedHealth Group (NYSE: UNH), which is reminiscent of the 2008 financial crisis. Despite recent setbacks, analysts remain cautiously optimistic about UNH's recovery and future growth, with price targets mostly in the $400+ range for 2025.
