By Mackenzie Tatananni

UnitedHealth Group was pulling the Dow higher on Thursday, as bullish notes from BofA Securities and Morgan Stanley propelled shares of the healthcare giant.

UnitedHealth stock charged 5.2% higher to $397, snapping a five-day losing streak. Counting Thursday's gains, shares are up 20% this year, outstripping a 10% gain for the benchmark S&P 500.

The recent optimism marks a complete reversal of fortune for the company. In April 2025, UnitedHealth posted a disastrous earnings report and slashed its guidance, causing the share price to plummet. One month later, the company pulled its outlook entirely and announced the resignation of CEO Andrew Witty, citing "personal reasons."

But sentiment has gradually improved as analysts pile back into the stock. BofA Securities became the latest cheerleader on Thursday, as the firm upgraded shares to Buy from Neutral with a $450 price target, up from $420.

Analysts pointed to "improving medical cost trends and supportive near-term data points," which they believe positions UnitedHealth for a "favorable" setup heading into second-quarter earnings.

If healthcare utilization trends continue to moderate, UnitedHealth -- which serves as a bellwether for the industry -- should lead a broader rally in shares of managed-care organizations, BofA contended.

The company is targeting 2026 adjusted earnings of greater than $18.25 a share. BofA thinks UnitedHealth will do even better, bumping its estimate to $18.70 from $18.60.

Morgan Stanley is setting the bar even higher. Analyst Erin Wright raised her price target on UnitedHealth to $453 from $395, while maintaining an Overweight rating. Wright, too, cited indications of more moderate utilization trends.

Moreover, she believes efficiency gains from artificial intelligence represent another lever to lift earnings. The company plans to invest $1.5 billion into the technology this year, saying it "conservatively" expects a 2-to-1 return on investment.

Positive affirmations were driving the healthcare sector higher. The State Street Health Care Select Sector SPDR exchange-traded fund advanced 3.2%, on pace for its largest single-day percent increase in more than a year. The fund counts UnitedHealth among its largest holdings.

Morgan Stanley separately raised its estimates for other health insurers, compounding the positive buzz around UnitedHealth and lifting the entire sector.

CVS Health rose 2.8%, while Centene and Elevance Health added 5.5% and 4.6%, respectively. Humana posted the steepest gains, spiking 6.6% to $349.10; Morgan Stanley rates the stock at Underweight with a $249 price target, up from $217 previously.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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June 04, 2026 12:38 ET (16:38 GMT)

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