Raymond James added UnitedHealth Group (NYSE:UNH) to its Analyst Favorites list, citing the company’s strong growth outlook and an appealing valuation relative to the market. After a period of underperformance versus the S&P 500, UNH shares now trade at a 22% discount, a historically favorable entry point for investors.

The analysts’ bullish thesis hinges on improving fundamentals and anticipated positive developments in 2025. The Medicare Advantage (MA) advanced rate notice, expected in late January, could serve as a catalyst, with policy risks under a potential Trump administration appearing less hostile compared to previous leadership.

UnitedHealth’s 2025 guidance also seems conservative, particularly in its medical loss ratio (MLR) projections, which assume a 150-basis-point increase over 2024 levels. Historically, the company has outperformed its initial guidance by an average of 4%, barring last year’s exceptional challenges, including MLR pressure and a cyberattack on Change Healthcare.