10 Most Undervalued High Quality Stocks to Buy According to Analysts

2. UnitedHealth Group Incorporated (NYSE:UNH)

Forward P/E Ratio: 15.94

Number of Hedge Fund Holders: 150

Analyst Upside Potential: 33.44%

UnitedHealth Group Incorporated (NYSE:UNH) is a large healthcare company that operates through two main business segments including Optum and UnitedHealthcare. Through Optum the company provides a variety of healthcare services, including data analytics, pharmacy services, healthcare delivery, and population health management. On the other hand, the UnitedHealthcare segment offers health insurance and benefits to different groups.

On March 5, J.P. Morgan analyst Lisa Gill maintained a Buy rating on the stock. The positive outlook from the analyst was based on the recent legal developments involving the company and the Department of Justice. Gill noted that the Special Master’s report recommended granting UnitedHealth Group Incorporated (NYSE:UNH) motion for summary judgment, indicating that the DOJ failed to adequately prove that UnitedHealth knowingly retained overpayments from unsupported diagnosis codes. This suggests a higher burden of proof for the DOJ, which is seen as a positive development for the company.

During the fiscal fourth quarter of 2024, UnitedHealth Group Incorporated (NYSE:UNH) reflected growth across both its business segments. The company grew its 2024 revenue by 8% year-over-year to reach $400.3 billion. The results were driven by growth in domestic consumers served under UnitedHealthcare which grew to 2.1 million and value-based clients served under Optum which grew to 600,000. It is one of the most undervalued high-quality stocks to buy according to analysts.

Polen Focus Growth Strategy stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:

“We trimmed our positions in UnitedHealth Group Incorporated (NYSE:UNH), Amazon, ServiceNow, and Gartner during the quarter. We trimmed our position in UnitedHealth to fund the purchase of CoStar Group. Despite short-term margin headwinds, our long-term expectations for UnitedHealth Group remain virtually unchanged, with the trim simply reflecting what we view as a superior investment alternative.”