Mizuho lifts UnitedHealth Group target to $440 on strong Q1 results

Mizuho has raised its price target for UnitedHealth Group (UNH) from $410 to $440, maintaining an 'Outperform' rating on the shares. The revision follows the company's strong first-quarter earnings, which exceeded estimates due to controlled costs and improved government payments. UnitedHealth Group also raised its full-year 2026 adjusted earnings outlook to more than $18.25 per share.

The bank cited a lower risk of negative medical loss ratio changes through the end of the year as a factor in its revised estimate. The managed care group delivered strong results in the recent Q1 earnings season, comfortably exceeding estimates by keeping costs in check and receiving improved government payments for its health insurance services.

UnitedHealth Group operates two distinct businesses: UnitedHealthcare (insurance) and Optum (health services). The company has an annual dividend yield of 2.31% and is included in a list of top dividend stocks according to hedge funds. The revised target represents an upside of 15% from the current share price.

Eagle Capital Management stated in its Q1 2026 investor letter that it expects annual EPS growth exceeding 20% for UnitedHealth Group. The firm cited bottoming conditions in Medicare Advantage costs and the implementation of AI as tailwinds, noting that the industry is transitioning from a downcycle of cost and price squeeze to a multi-year improvement in margins and returns.

The managed care industry has recently experienced a downcycle of cost/price squeeze affecting major providers like UnitedHealth Group and Humana. Eagle Capital Management highlighted that both companies have significant scale advantages in a consolidated industry that outgrows the overall economy, with actions to reduce costs and implement AI serving as incremental tailwinds.