UnitedHealth Fuels Bullish Mood With 4-Month High Close As Medicare Star Ratings, Reaffirmed 2025 Outlook Ease Investor Fears

UnitedHealth shares closed up nearly 9% at a nearly four-month high on Tuesday after Wall Street analysts said the health insurer’s preliminary Medicare Advantage star ratings came in better than feared, even as industry benchmarks for Stars grew tougher.

The insurer said about 78% of its members are expected to be in plans rated four stars or higher for Star Year 2026, up from last year and consistent with historical averages. 

UnitedHealth also reaffirmed its 2025 adjusted earnings outlook, first issued in July, when it forecast revenue of $445.5 billion to $448.0 billion and adjusted earnings of at least $16 per share, down from $27.66 in 2024. The guidance includes the recently closed acquisition of Amedisys.

Leerink said the disclosure was “better than feared,” highlighting UnitedHealth’s performance despite tougher Consumer Assessment of Healthcare Providers and Systems (CAHPS) cut points and new weighting factors. The research firm, which maintained an ‘Outperform’ rating, also noted that UnitedHealth appeared to have broken from the traditional ‘embargo period,’ where plans typically hold ratings details until official publication by the Centers for Medicare & Medicaid Services (CMS).

Truist raised its price target on the stock to $365 from $310 while maintaining a ‘Buy’ rating, calling the update a “solid” first look at 2026. 

JPMorgan analyst Lisa Gill reiterated an ‘Overweight’ rating, writing that the data was “likely better than some investors feared,” while Barclays kept an ‘Overweight’ stance with a $352 target, saying the news “should help alleviate investor concerns” and reinforced its thesis of multi-year margin improvement.

Leerink added that CMS released cut points for Star Year 2026 and Payment Year 2027 through the HPMS system on Monday night, which is how UnitedHealth was able to disclose its percentages ahead of a conference presentation. “It is possible that if UNH did better, someone could have done worse,” Mayo wrote, noting that cut points overall looked “challenged.”

Hyperlift’s Phillip Collins, in a LinkedIn post, said the 2026 cut points represented “another hard year,” noting that 58% of the measures got harder, 17% easier and 25% stayed the same. 

Pharmacy measures were especially difficult, with 15 cut points getting tougher and only one easing. Collins said technical specifications also showed declines in colorectal screening measures due to the transition to electronic clinical data systems.

UnitedHealth’s preliminary disclosure applies to Star Year 2026 and impacts payment year 2027, a key driver of future Medicare Advantage reimbursements. 

On Stocktwits, retail sentiment for UnitedHealth flipped to ‘bullish’ late Tuesday, versus ‘bearish’ a day ago, amid a 181% spike in 24-hour message volume.

UnitedHealth’s stock has declined 30.4% so far in 2025, weighing heavily on the Dow Jones Industrial Average and making it among the worst S&P 500 performers this year.

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