UnitedHealth wins Outperform at Evercore despite elevated utilization trends

 Evercore ISI launched its coverage on UnitedHealth Group (UNH) with an Outperform recommendation, while noting that the managed care sector is positioned to face utilization trends that will remain elevated throughout 2026.

Health insurers such as UnitedHealth (UNH) have trailed profit expectations in recent quarters amid a post-COVID spike in medical utilization that pressured their cost base.

“Utilization trends should remain elevated through 2026, but we expect most plans by now have become accustomed to elevated trends and have priced for them,” Evercore analyst Elizabeth Anderson wrote.

While UnitedHealth (UNH) and CVS Health (CVS) have priced appropriately to protect margins in their Medicare Advantage businesses, Humana (HUM) has taken a different approach focused on retention, “which could lead to some margin degradation in their MA business in 2026,” she wrote. Additionally, the analyst forecasts elevated utilization to hurt margins in Medicaid plans, given an ongoing mismatch in rate-acuity.

Anderson listed CVS Health (CVS), UnitedHealth (UNH), and Humana (HUM) as her top picks in managed care in that order. With an Outperform rating, she raised her price target on CVS to $100 from $95 and lowered the target for Humana (HUM) to $260 from $285 with an In-Line rating.

UnitedHealth (UNH) received an Outperform rating and a $400 target based on gradually improving MA margins, strong pricing actions for the 2026 plan year, and a successful turnaround strategy by the company's management.  

“2027 and 2028 are likely to be when significant improvement starts to become more visible, with potential upside to both our estimates and multiples as the execution story becomes increasingly visible,” the analyst wrote.

Anderson commented on agilon health (AGL), noting that the primary care provider, which focuses on value-based care for seniors, could move forward with its turnaround plan next year, focusing on profitability and cash retention over growth.

https://www.msn.com/en-us/money/general/unitedhealth-wins-outperform-at-evercore-despite-elevated-utilization-trends/ar-AA1TGzv0