10:47 AM EDT, 08/18/2025 (MT Newswires) -- UnitedHealth Group ( UNH ) has potential for upside in 2027, which depends on the company's Medicare Advantage stars performance and its ability to consistently achieve its financial guidance, Bank of America Securities said in a Monday research report.

Upcoming star ratings data for 2027 from the Centers for Medicare and Medicaid Services that is due in mid-October will offer insights into the percentage of the company's Medicare Advantage membership that will receive a 5% quality bonus. "Stars performance can make or break [Medicare Advantage] profitability...If stars drop meaningfully in 2027, the return to normalized margins would be pushed to 2028," the analysts said.

The company's most important datapoint will be the 2027 Medicare Advantage rate update, expected to be released in February 2026. While the 2026 rate update was the highest rate in a decade, the biggest challenge with MA is not paying for trend, with 2026 being the last year phase-in of V28. Although the trend update could be higher in 2027, a new coding adjustment could negate the progress UnitedHealth ( UNH ) makes in the coming years, according to BofA.

The brokerage reiterated a neutral rating on the stock and increased its price target to $325 per share from $290.

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