Is UnitedHealth Stock Still a Buy in August After Its Q2 Beat Last Month?

UnitedHealth Group (NYSE: UNH | UNH Price Prediction) reported Q2 2026 results on July 16, and the numbers cleared even the higher end of Wall Street’s expectations. But the stock has slid 3.43% since, leaving some investors to question whether or not it remains a buy.

On Tuesday shares traded around $408.86, up nearly 22% year to date and almost 70% over the past year. Meanwhile, KeyBanc has pushed its price target to $500 from $475, while UBS moved to $490 from $460. Here’s what investors keeping an eye on the stock need to know.

Margins Do the Heavy Lifting

The real story sits in the medical care ratio. It came in at 86.7%, a 270 basis point improvement from a year ago, aided by $860 million in net favorable prior period reserve development. That flowed straight through to operating income of $7.99 billion, up 55.17% year over year. UnitedHealthcare’s operating margin expanded to 4.6% from 2.4%, and Optum tacked on 160 basis points to hit 6.2%. I liked how clean the profitability recovery looked given the mess late 2025 left behind.

Membership Still Shrinking

The offset is volume. Medicare Advantage membership has contracted by 965,000 since year-end 2025, and Optum Health revenue fell 5% year over year on roughly 700,000 fewer value-based care patients. Optum Rx adjusted scripts slid to 387 million from 414 million. Much of this is deliberate exit from unprofitable contracts, but you’ll want to see when the attrition levels off.

Guidance Gets a Meaningful Bump

Key figures for Q2 2026 and the raised outlook:

• EPS: $6.38
• Revenue: $112.03 billion, up 0.4% YoY
• Net Income: $5.48 billion, up 61.01% YoY
• Operating Cash Flow: $11.1 billion (1.9x net income)
• 2026 Adjusted EPS Guide: $19.50 to $20, raised from a prior floor above $17.75
• 2026 Buyback: at least $5 billion, doubled from ~$2.5 billion; $4 billion already executed through mid-July

The doubled repurchase authorization is the quiet flex here. Management doesn’t back that up unless they’re confident in the cash conversion trajectory.

Hemsley Keeps It Sober

CEO Stephen Hemsley framed it plainly, saying “Our results and outlook reflect the continuing progress in our work to simplify how we operate, improve both affordability and the health care experience for patients and care providers and apply modern technology to create real improvement for people.” KeyBanc’s Matthew Gillmor was more pointed, noting the quarter “topped bullish expectations” and flagging a path to roughly $30 in EPS sooner than expected.

Watch the Commercial Repricing

KeyBanc attributed the muted immediate reaction to “elevated investor expectations and higher costs within commercial.” That’s the piece I’d track next. Consensus target now sits at $471.80, implying about 11% upside, with 22 Buy ratings against one Sell rating. If MCR holds through the back half, the $20 EPS ceiling starts looking conservative.

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