Goldman Sachs Just Added UnitedHealth (UNH) to Its Conviction List. Here’s Why the Stock Could Soar.
Goldman Sachs (NYSE: GS) ranks among the Wall Street elite. When the investment bank likes a given stock, it’s a big deal. But when Goldman Sachs puts a stock on its conviction list, it’s a really big deal.
Last week, Goldman Sachs added UnitedHealth Group (NYSE: UNH) to its U.S. conviction list. UnitedHealth Group is the largest U.S. health insurer and the world’s fourth-largest healthcare company by market cap. However, its stock has taken investors on a rollercoaster ride over the last 18 months.
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But a top Wall Street firm now believes UnitedHealth is one of the best stocks on the market to buy. Here’s why that confidence could be well-placed.
Why is Goldman Sachs bullish about UnitedHealth?
The main reason Goldman Sachs added UnitedHealth Group to its conviction list relates to Medicare Advantage. UnitedHealth served more than 7.5 million Medicare Advantage members as of March 31, 2026. Goldman Sachs believes the giant health insurer is approaching an inflection point in its underwriting cycle for these plans, which should lead to bottom-line improvement.
Much of the volatility in UnitedHealth Group’s shares last year stemmed from higher-than-expected Medicare Advantage plan costs. UnitedHealth even had to temporarily withdraw its full-year guidance due to the cost overruns. The volatility in the health insurance stock in 2026 was primarily due to the Centers for Medicare & Medicaid Services (CMS) proposing a minuscule rate increase for Medicare Advantage providers in 2027.
However, neither issue is as worrisome now. UnitedHealth exited Medicare Advantage markets in 109 counties across 16 states that weren’t profitable enough. These moves helped the company reduce its overall medical cost ratio by 90 basis points year over year in the first quarter of 2026. Also, CMS issued final 2027 Medicare Advantage rate increases that were much higher than its initial proposal.
UnitedHealth’s improving Medicare Advantage prospects aren’t the only reasons why Goldman Sachs favors the stock, though. The company’s Optum unit also has strong growth opportunities despite facing some temporary headwinds.
Why UnitedHealth stock could soar
Goldman Sachs’ 12-month price target for UnitedHealth reflects potential upside of around 12% above the gains achieved over the last six weeks. The investment bank isn’t the only Wall Street firm that views the stock favorably. Of the 28 analysts surveyed by S&P Global (NYSE: SPGI) in May, 22 rated UnitedHealth stock as a “buy” or “strong buy.”
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