UnitedHealth Earnings: Strength Across the Board Boosts 2026 Outlook

Key Morningstar Metrics for UnitedHealth Group

• Fair Value Estimate
  : $475.00
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : High

What We Thought of UnitedHealth Group’s Earnings

On July 16, UnitedHealth Group UNH reported second-quarter results, including roughly steady revenue at $112 billion (versus FactSet consensus of $111 billion) and 56% adjusted EPS growth to $6.38 (versus consensus of $4.91), mostly on margin expansion. The firm also raised its 2026 guidance.

Why it matters: In early trading, shares rose about 5% on these strong results and a higher outlook for 2026 that reflected more than its second-quarter outperformance, suggesting continued momentum through the rest of 2026 in contrast to key peer Elevance’s underwhelming guidance for the rest of the year on July 15.

• We were particularly impressed with the medical insurance segment’s medical cost ratio decline to 86.7% in the quarter from 89.4% in the prior-year period, which helped to nearly double segment profits year over year. Management lowered its MCR guidance for 2026 by 70 basis points on this strength, too.
• But most business lines looked stronger than previously anticipated, which led to higher 2026 outlooks for EPS to $19.50-$20.00 (from over $17.75 previously), operating cash flow of $24 billion (from over $18 billion), and share repurchases to at least $5 billion (from $2.5 billion).

The bottom line: To reflect these strong 2026 trends and recent cash flows, we are increasing our fair value estimate by 11% to $475 per share from $427 previously. Shares look fairly valued after rising over 30% since the beginning of the year.

• Our narrow moat rating for UnitedHealth remains intact, too, and the firm continues to have significant room for operational challenges or regulatory changes before its long-term ability to generate economic profits would be impaired.
• Regulatory challenges, particularly around its Medicare Advantage and pharmacy benefit management operations, remain a concern, though we recognize these in our higher-than-typical Morningstar Uncertainty Rating of High, which directly affects our margin of safety requirements for shares.