UnitedHealth's (UNH) commitment to a long-term adjusted earnings growth target of 13% to 16% is encouraging, but there is uncertainty around the advance rate notice announced earlier this week, RBC Capital Markets analysts said in a Tuesday note.
Analysts said that following the weaker-than-expected proposal from the Centers for Medicare & Medicaid Services, the company looked to back away from a double-digit earnings growth projection for next year.
"With 2027 buy-side expectations likely coming down based on feedback we've heard from some investors, we remain cautious around managed care this year," RBC said.
Analysts said that unlinked chart reviews could pose as a headwind for UnitedHealth next year and beyond, but note that this can be offset by MCO pricing actions.
RBC retained an outperform rating on the stock, but lowered its price target to $361 from $408.
Shares of the company were up 4% in recent Wednesday trading.
Price: 292.33, Change: +9.63, Percent Change: +3.41
