TD Cowen Downgrades UnitedHealth Stock Amid Medicare Advantage Concerns

TD Cowen downgraded UnitedHealth Group's stock from "Buy" to "Hold" and cut the price target from $520 to $308, citing significant challenges ahead, including impacts from the version 28 (v28) Medicare Advantage risk adjustment model and accelerating cost trends in commercial and Medicaid sectors. Analyst Ryan Langston highlighted that UnitedHealth's above-average Risk Adjustment Factor (RAF) scores could be disproportionately affected, undermining its competitive coding advantage and pressuring margins in 2025 and 2026. Additional headwinds include regulatory scrutiny, a recent CEO resignation, suspension of 2025 guidance, and reports of a possible U.S. Department of Justice investigation, adding uncertainty to the outlook. Despite the downgrade, the consensus among 28 brokerage firms remains an "Outperform" rating with an average price target around $434, reflecting optimism about the stock's longer-term potential. GuruFocus estimates a fair value exceeding $700 per share, suggesting significant upside from current levels, though TD Cowen's cautious stance underscores near-term risks. The situation reflects mixed analyst views balancing UnitedHealth's strong fundamentals against emerging regulatory and operational challenges.