UnitedHealth Group (UNH) stock has been a major underperformer in 2025, with UNH down nearly 50% year-to-date amid rising medical costs, regulatory scrutiny, and a Department of Justice investigation into billing practices. However, the company received a major vote of confidence after the closing bell today, when Warren Buffett's Berkshire Hathaway (BRK.A) (BRK.B) disclosed a substantial new position in UnitedHealth totaling 5.04 million shares, valued at approximately $1.57 billion.
As a result, UNH stock has surged over 8% in after-hours trading. That puts UnitedHealth on pace to challenge its overhead 50-day moving average in Friday’s session. The shares haven’t closed above this descending trendline since mid-April.
Why Did Buffett Buy UNH Stock?
Valued at $246 billion by market cap, UnitedHealth maintains its position as America's largest health insurer. Despite operational headwinds, the company has maintained its quarterly dividend of $2.21 per share. UNH now yields approximately 3.25%, demonstrating its commitment to shareholder returns and financial stability.
Plus, after its steep selloff this year, the stock’s current valuation of 11.5 times projected 2027 earnings is significantly below historical averages - suggesting the market may be pricing in an overly pessimistic outlook.
What’s the Forecast for UNH Stock?
Management anticipates a return to growth in 2026 as premium pricing adjustments take effect to offset higher medical costs, particularly in Medicare Advantage plans.
Recent trading sessions have shown signs of positive momentum for UNH, with shares rising approximately 11% over the past 5 days as part of a broader rotation into beaten-down healthcare stocks - though the name remains well off its previous highs.
Along with Buffett, Wall Street maintains a generally positive outlook on the beaten-down stock, which has a consensus “Moderate Buy” recommendation. JPMorgan recently reiterated a “Buy” rating and set a $310 price target for UNH, suggesting about 14% expected upside potential from Thursday’s close.
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