Speculation over a potential Berkshire Hathaway stake, alongside big moves from notable institutional investors, has added to the momentum in UnitedHealth shares.
UnitedHealth Group jumped nearly 4% on Wednesday, marking its fourth straight day of gains, and kept climbing after hours after the board approved a $2.21 per share quarterly dividend.
The payment, set for Sept. 23 to shareholders on record by Sept. 15, matches the 5% boost announced in June, when the company said it had returned $4.5 billion to investors through dividends and buybacks in the second quarter (Q2).
Despite the recent rally, UnitedHealth remains among the 10 worst-performing S&P 500 stocks this year, with shares down 46% year-to-date compared with a 10% gain for the index.
However, fresh dividend news and renewed investor interest have lifted sentiment.
Retail sentiment has flipped from ‘bearish’ to ‘bullish’ in a single day, with message volume on Stocktwits rising nearly 38% over the past 24 hours.
Traders on the platform are increasingly speculating whether Warren Buffett’s Berkshire Hathaway could be building a position in UNH ahead of a 10-Q filing on Thursday.
Berkshire has been allowed to keep one or more holdings confidential in recent quarters, fueling intrigue over the identity of a “mystery stock” that filings suggest could be worth about $5 billion, according to a report by Barron’s.
While Berkshire cut stakes in Citigroup, Bank of America, Capital One and Nubank earlier this year, some retail traders hope UnitedHealth might be among its undisclosed bets.
Berkshire’s quarterly disclosures do not reveal which investments are made by Buffett himself, his portfolio managers Todd Combs and Ted Weschler, or incoming CEO Greg Abel, who is set to succeed Buffett in January.
Institutional buying has also bolstered sentiment. Renaissance Technologies has taken a fresh stake in UnitedHealth, picking up about 1.35 million shares worth roughly $421.8 million, according to investor research platform Quiver Quantitative. Value investor Chris Davis has made an even bolder move, reportedly increasing his UNH holdings by 2,235% to $414 million, according to recent 13-F filings.
Koyfin data puts UnitedHealth’s forward P/E at 16.7, higher than Elevance Health’s 9.5 and Cigna’s 9, but still trailing Humana’s 19.2. While not the cheapest among its peers, UNH is considered undervalued, given its scale and the substantial revenue and profit it generates annually.
Brokerage Calls
Analyst sentiment has been mixed following UnitedHealth’s latest guidance reaffirmation.
UnitedHealth reaffirmed its full-year 2025 outlook after hitting pause earlier this year, but the new numbers didn’t quite land where Wall Street had hoped. The company expects revenue between $445.5 billion and $448 billion and adjusted earnings of at least $16 per share.
Last week, Wells Fargo cut its price target to $267 from $306 but maintained an ‘Overweight’ rating after meeting with management, stating that the company appears confident in its targets and is taking a conservative approach to cost trends and margin recovery.
At the same time, Bernstein lowered its target to $337 from $377 and maintained an ‘Outperform’ rating, citing a reduced earnings base for 2025 but optimism over a potential sector rebound.
Other firms, including Baird, which earlier downgraded the stock to ‘Underperform’ with a $198 target, have flagged pressure on OptumHealth margins and limited upside. Multiple research firms, including Truist, TD Cowen, Oppenheimer, Piper Sandler, BofA, and KeyBanc, also trimmed their price targets, with most maintaining their ratings unchanged.
According to Koyfin, analyst coverage remains broadly positive among 26 analysts covering the stock: six with a ‘Strong Buy,’ 13 with a ‘Buy,’ five with a ‘Hold,’ two with a ‘Sell,’ and none with a ‘Strong Sell.’
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