CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Ahead of the Q1 earnings release on April 16, we lower our 12-month target price by $20 to $497, 18x our 2024 EPS estimate (down by $0.18 to $27.62; we cut our 2025 estimate by $0.16 to $31.20), above peer multiples, but below UNH’s three- and five-year averages of 21.7x and 20.2x, respectively. CMS recently finalized its CY 2025 average benchmark rate change for Medicare Advantage at -0.16%, below market expectations for a small increase, in our view, though some improvement from the 1.14% cut in CY 2024. We think the rate change may put further pressure on industry margins, particularly as the industry is battling rising medical loss ratios due to deferred care from the pandemic and higher levels of medical utilization. Following the cyberattack on UNH’s Change Healthcare business in February, the company continues to work on restoring full service to products spanning payer services, clinical data exchange, and risk management. We await Q1 reporting for potential estimates of the financial impact.