Key insights
- Cantor Fitzgerald reiterated an Overweight rating on UnitedHealth Group (UNH), citing upcoming Medicaid contract decisions as key catalysts. These contracts, particularly the Texas Star Kids and Texas STAR/CHIP, involve significant enrollment and revenue, with UNH competing against major players like CVS Health and Elevance Health. Positive outcomes could boost UNH's stock, while competitive pressures and contract wins/losses for rivals like CVS Health also present market signals for the healthcare sector.
Investing.com - Cantor Fitzgerald reiterated an Overweight rating on UnitedHealth Group (NYSE:UNH) stock with a $440.00 price target on Thursday.
The firm identified upcoming Medicaid contract decisions as key catalysts for the health insurer. The Texas Star Kids contract covers 137,000 enrollees and $4 billion in long-term services and supports for the Children’s Health Insurance Program.
Current incumbents for the Texas Star Kids contract include UnitedHealth, Centene, Elevance Health, CVS Health and four private companies. The firm also noted pending protest resolutions for two other major contracts.
The Texas STAR and CHIP contract covers 3.1 million enrollees and $9.7 billion, with winners including CVS Health, UnitedHealth, Molina Healthcare, Elevance Health, Centene and Humana. CVS Health, trading near its 52-week high of $98.61, has delivered a 54.6% return over the past year and maintains a market cap of $125 billion. According to InvestingPro analysis, the stock appears undervalued with a Fair Value of $121.69, positioning it on the platform’s Most Undervalued list. The Georgia Families and Families 360 contract winners are Molina Healthcare, UnitedHealth and Humana.
Cantor Fitzgerald said these Medicaid developments represent the next catalysts for the company.
In other recent news, CVS Health announced updates to its commercial formularies, expanding weight management medication options. The company will add Zepbound (tirzepatide) back to its commercial formularies as a preferred option effective October 1, 2026, and will remove the new-to-market block on Foundayo (orforglipron) effective June 1, 2026. Additionally, Piper Sandler reiterated an Overweight rating on CVS Health stock with a price target of $113.00, maintaining its model based on a 12x multiple of calendar year 2028 adjusted earnings per share. In related developments, ARCTRUST Private Capital acquired a seven-property retail portfolio that includes three CVS Pharmacy locations across six states, which will be offered as ARCTRUST Exchange II DST to accredited investors. The portfolio features a weighted average remaining lease term of approximately 13.6 years. CVS’s decision to add Zepbound to its preferred drug list has also impacted Eli Lilly, as CVS Caremark will now cover Lilly’s full obesity medicine portfolio. These recent developments reflect CVS Health’s ongoing efforts to enhance its offerings and maintain strong partnerships.
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