Matteo Colombo The managed care space is well positioned to deliver long-term growth despite recent headwinds in the Medicare Advantage market, Baird said, as it initiated the coverage of a slew of health insurer stocks with Outperform ratings. Its bullish views contrast with a recent selloff in managed care firms, especially those exposed to the MA market, such as UnitedHealth ( NYSE: UNH ), Humana ( HUM ), and CVS Health ( CVS ). All three stocks have sold off this year amid cost concerns linked to their MA businesses following a post-pandemic spike in medical utilization among seniors.
“We believe Managed Care is structurally well positioned to drive sustainably attractive long-term growth, margin expansion and multiple expansion beyond historical levels,” Baird analyst Michael Ha wrote. With an Outperform rating and a $597 target, Baird named UnitedHealth ( UNH ) its top structural long in the managed care space. Meanwhile, Alignment Healthcare ( ALHC ), Elevance Health ( ELV ), and Astrana Health ( ASTH ) became its top picks, with Outperform ratings and price targets at $10, $54, and $649, respectively.
Other health insurers to receive Baird’s Outperform ratings include Cigna ( NYSE: CI ), Molina Healthcare ( NYSE: MOH ), and Oscar Health ( OSCR ), with price targets at $388, $405, and $28 per share. Analyst Ra cited value-based care, which links reimbursements to the quality of care delivered, as a potential tailwind for managed care growth. In addition to Astran.
