Time to Buy UnitedHealth-Heavy ETFs?

Berkshire acquired just over 5 million UnitedHealth UNH shares worth $1.57 billion as of June 30. The disclosure lifted UNH shares 12% on Aug. 15, 2025, with fresh stakes from David Tepper’s Appaloosa and Stephen Mandel’s Lone Pine Capital, adding further confidence. The stock has added more than 300 points to the Dow Jones in August, making up more than 40% of its monthly gain.Should You Buy UNH?UnitedHealth's second-quarter earnings missed estimates. Its high operating costs due to rising medical expenses weighed on margins. Operating expenses increased 13.2% year over year in the first half of 2025. UnitedHealth's MCR was 89.4% in 2Q25, which indicates a deterioration of 430 bps year over year.Revenues are now projected between $445.5 billion and $448 billion in 2025, up from $400.3 billion in 2024. Net earnings are now expected to be at least $14.6 billion, up from the 2024 level of $14.4 billion.Management now projects adjusted net EPS to be at least $16 for 2025, down from the previous guided range of $26-$26.50 compared with the 2024 figure of $27.66. Operating cash flows are now projected to be $16 billion, down from $24.2 billion in 2024.Is Valuation Cheap?Over the past year, UnitedHealth's shares have underperformed the industry. UNH shares have fallen 47.5% over the past year (as of Aug. 15, 2025). The company’s valuation is below its five-year median.UNH’s current valuation of 10.83X forward P/E has witnessed massive declines in recent months. Over the past five years, the stock has traded as high as 26.63X and as low as 9.94X, with a 5-year median of 19.2X. While this shows growing concerns among investors, a cheaper valuation probably enticed Buffett’s Berkshire to bet on UNH shares.Points of Strength Revenues of the health benefits business of UnitedHealth advanced 17% year over year to $86.1 billion in the second quarter due to an increase in domestic commercial membership growth. The metric beat the Zacks Consensus Estimate of $84.8 billion.Revenues in the Optum business line were $67.2 billion, which rose 6.8% year over year due to strong contributions from Optum Rx.The completion of Amedisys’ acquisition further strengthens UNH’s market presence within healthcare services.Price TargetNote that “investors in UnitedHealth have had a really tough year,” said Utterback, who tracks the stock’s decline to early December, when former executive Brian Thompson was fatally shot outside an investor conference in New York. The stock is still down 40% in 2025 and is trading at a little more than $300, per Bloomberg, as quoted on Yahoo Finance. The stock has a Zacks Rank #5 (Strong Sell).Utterback has a buy rating and $400 price target on shares. Analysts at BofA Securities also raised its price target on the stock to $325 from $290, per the above-mentioned article. Based on short-term price targets offered by 21 analysts, the average price target for UnitedHealth Group comes to $306.62.The forecasts range from a low of $198.00 to a high of $440.00. The average price target represents a decline of 0.61% from the closing price of $308.49 recorded on Aug. 18, 2025.ETFs in Focus Against this backdrop, investors can play UNH-heavy ETFs like iShares U.S. Healthcare Providers ETF IHF, T. Rowe Price Health Care ETF TMED, Harbor Health Care ETF MEDI and Health Care Select Sector SPDR Fund XLV. The ETF or the basket approach is better than the stock approach as the former minimizes the company-specific concentration risks.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Health Care Select Sector SPDR ETF (XLV): ETF Research Reports iShares U.S. Healthcare Providers ETF (IHF): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks