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Hedge Funds Tout UnitedHealth as Undervalued Blue Chip Stock
31 Jul
Summary
- J.P. Morgan analyst assigns Overweight rating, $418 price target
- Company's shift to "proactively cooperating" with DOJ viewed as defense
- Potential for rebound of 48% in the next 12 months
According to the latest analysis, UnitedHealth Group Incorporated (NYSE:UNH) is considered one of the most undervalued blue chip stocks by hedge funds. In a recent report, J.P. Morgan analyst Lisa Gill assigned an Overweight rating to UnitedHealth Group with a $418 price target, suggesting the company could rebound by as much as 48% in the next 12 months.
The analyst noted that UnitedHealth Group's shift from being "unaware" in February to "proactively cooperating" with the Department of Justice (DOJ) is not surprising, as she views the company's engagement as part of a broader defense of its practices. While acknowledging the potential legal risks, the analyst expressed an optimistic outlook, stating that if the court were to view this case similarly to previous ones brought by the DOJ regarding the False Claims Act, the burden of proof would be on the DOJ to prove any improper coding.
UnitedHealth Group operates through several segments, including OptumRx, OptumInsight, OptumHealth, and UnitedHealthCare, all of which have demonstrated solid operations. Despite the potential legal challenges, the company's strong market position and diversified business model make it an attractive investment opportunity for hedge funds and other investors seeking undervalued blue chip stocks.
