UNH Should I Buy
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UnitedHealth Group Inc (UNH) is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock is facing significant challenges, including a sharp decline in membership, disappointing financial performance, and a lack of clear positive catalysts. While the dividend yield remains secure, the overall sentiment and technical indicators suggest caution. Holding the stock or waiting for further clarity on its recovery trajectory would be more prudent.
The technical indicators for UNH are bearish. The MACD is below 0 and negatively contracting, the RSI is neutral at 50.962, and the moving averages show a bearish trend (SMA_200 > SMA_20 > SMA_5). The key support level is at 269.284, and resistance is at 288.406. The stock is trading near resistance, with no clear upward momentum.
The company's dividend yield of 3.2% remains secure despite rising medical costs, which may attract income-focused investors. Some analysts believe the recent selloff is overdone and expect sentiment to improve with clearer EPS guidance.
The company expects to lose up to 2.8 million members, which has already caused a 20% drop in stock price. Q4 2025 financials showed a significant decline in net income (-99.82% YoY) and EPS (-99.83% YoY). Analysts have consistently lowered price targets due to disappointing Medicare Advantage rates and uncertainty around 2026 guidance. Congress trading data shows a cautious stance, with three sale transactions and no purchases in the last 90 days.
In Q4 2025, revenue increased by 13.11% YoY to $113.2 billion, but net income dropped drastically to $10 million (-99.82% YoY), and EPS fell to $0.01 (-99.83% YoY). The company's gross margin remained flat. These results indicate significant financial challenges despite revenue growth.
Analysts have lowered price targets across the board, citing concerns about Medicare Advantage rates, membership losses, and uncertainty in 2026 guidance. However, most analysts maintain a Buy or Overweight rating, reflecting long-term optimism despite short-term challenges.
