UnitedHealth Clears Major Acquisition Hurdle Amid Cautious Analyst Outlook

A significant legal obstacle has been removed for UnitedHealth Group Inc. A U.S. district court approved the company's settlement with the Department of Justice regarding its acquisition of Amedisys Inc., a deal that had been under intense antitrust scrutiny for months. This clearance allows the health insurance giant to proceed with integrating the home health and hospice provider into its Optum health services division. Despite this regulatory green light, equity researchers at Baird have maintained a cautious stance on the stock, even as they substantially increased their price target.

On December 11, the court formally sanctioned the agreement between UnitedHealth and the DOJ. This decision paves the way for the finalization of a transaction central to UnitedHealth's strategy of expanding its value-based care offerings. The approval arrives after a period marked by regulatory challenges and investigations, offering a measure of stability. For UnitedHealth, which has faced a difficult period characterized by pressure on its Medicare Advantage segment and contracting margins, the ruling demonstrates that strategic acquisitions remain viable under heightened regulatory oversight.

Price Target Raised, But Rating Stays Negative

In response to recent developments, analysts at investment firm Baird have updated their valuation model for UnitedHealth. They raised their price target to $291 from $198. However, they reaffirmed their "Underperform" rating on the shares. This adjustment primarily reflects the equity's recovery from its lows near $234. With the stock currently trading around $328, the new target still suggests a potential downside of approximately 11%.

Should investors sell immediately? Or is it worth buying Unitedhealth?

The firm's analysis indicates that the recent share price rally may have outpaced the underlying business fundamentals. Persistent challenges in the Medicare Advantage business, including elevated medical costs and higher utilization rates, are not yet fully resolved. Management has raised its adjusted earnings per share outlook for 2025 to at least $16.25, yet this figure remains well below initial expectations held at the end of 2024.

Recovery Path Faces Headwinds

While UnitedHealth's shares have rebounded from their trough, they continue to trade substantially below their 52-week highs of over $600. In an effort to stabilize profitability, the company has terminated unprofitable Medicare Advantage contracts, affecting roughly 600,000 members. The integration of Amedisys is expected to provide new growth momentum from 2026 onward, contingent on Optum returning to its role as a key earnings driver.

Market attention is now focused on whether the stock can sustain its level around $320. The company's quarterly results, expected in January 2026, are likely to offer clearer evidence on whether operational performance has truly bottomed. Until then, the gap between the current market price and analyst targets remains a source of potential volatility for investors.