Target prices in the $40.00−$46.00 range: The firms are of the view that lower levels of utilization and recession-related medical deflation will generate earnings growth for the company throughout 2011 and beyond. UnitedHealth Group is a multiline insurer, with exposure to commercial markets, government business, and information services among others. The firms believe this multifaceted model is a good way for investors to hedge some of the industry risks and that its business momentum is unmatched in the sector.

UnitedHealth’s earnings exposure to the Individual/Small Group market appears manageable at an estimated ~10% of 2010 earnings, although the company is clearly more exposed to Med Adv cuts than its national peers as less than 30% of the plan’s earnings come from Med Adv. The company is reviving from a phase of below-industry performance and they believe its premium valuation will return with rebounding enrollment growth. Driven by improved customer focus with better systems, completed acquisition network integrations, and more regional management, UnitedHealth's performance should continue to improve.

The firms are positive on UnitedHealth's strong balance sheet with debt to capital ratio that is in line with the industry peers, improved cash flow, and share repurchases. The firms also believe that, UnitedHealth is leveraging its national scale with local market focus, and is moving toward a more service-oriented culture. United also continues to expect save $1 billion in administrative costs over a five-year period through its cost management program.