UnitedHealth Considers Major Divestiture Amid Analyst Optimism for Recovery

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The healthcare conglomerate UnitedHealth is reportedly in advanced discussions to divest a significant international asset, a move that coincides with several prominent Wall Street firms endorsing its stock for a potential rebound in the coming year.

According to reports from Reuters and Sky News, private equity firm TPG is nearing an agreement to acquire UnitedHealth's Optum UK business. The transaction is valued between £1.2 billion and £1.4 billion, equivalent to approximately $1.6 billion to $1.8 billion. A final announcement could be made within weeks.

At the heart of the deal is EMIS, a leading provider of electronic patient record systems used by a majority of UK general practitioners. UnitedHealth itself had purchased EMIS for about £1.24 billion as recently as 2023. While investment firm Blackstone had also expressed interest, TPG is currently the frontrunner. Bank of America is advising on the sale process.

This potential divestiture aligns with a broader strategic initiative by UnitedHealth to streamline its portfolio and sharpen its focus on core operations, following an exceptionally challenging period.

Market Strategists Identify Value Despite Share Price Decline

Despite the stock's significant underperformance—shares fell roughly 33% over the past year—equity researchers from multiple investment banks are turning bullish. Analysts at Bernstein SocGen have named UnitedHealth their top recommendation for 2026, raising their price target to $444. Barclays reaffirmed its Overweight rating with a $391 target, and Evercore ISI initiated coverage with an Outperform rating.

The consensus view among 25 covering analysts points to an average price target near $393, implying an upside potential of about 15% from current levels. The most optimistic target on Wall Street stands at $444.

Forthcoming Earnings Report Pivotal for Investor Sentiment

The company faces a critical test on January 27, when it is scheduled to release its full-year 2025 results and provide initial guidance for 2026. The report is highly anticipated, with expectations tempered by recent difficulties.

The past fiscal year was marked by unexpectedly high levels of patient medical visits and procedures, which severely pressured profitability. In the third quarter, the net margin contracted to 2.1%, a sharp decline from approximately 6% in the prior-year period. Adjusted earnings per share (EPS) fell to $2.92 from $7.15.

For the entirety of 2025, analysts project adjusted EPS of around $16.30, representing a 41% decrease compared to 2024. A moderate recovery to $17.60 per share is forecast for 2026.

The key focus for investors will be whether management can deliver convincing evidence that cost controls are taking effect and that the medical care ratio is trending downward. Without such reassurance, the stock is likely to remain under pressure even after the earnings release.