UnitedHealth Group (UNH): Clean Beat

Morgan Stanley expects UNH shares to rise on another beat and raise in 2026, as EPS guidance inches higher. UNH once again exceeded quarterly expectations, delivering a ~+$0.62 EPS beat ($4.69 vs. Cons $4.07) and ~150 bps MLR beat (88.4% vs. Cons 89.9%). 3Q26 MLR included $610M of net favorable PPD contributing ~70 bps of outperformance. 2026 EPS guidance was raised by +$0.75 at the midpoint to >$20.50, implying 4Q26 EPS of $2.20 (vs. Cons $2.16), while 2026 MLR guidance was unchanged at 88.1% +/- 25 bps. Optum Health also handily exceeded expectations with adj. EBIT of $588M vs. Cons $160M. Segment results: Optum Insight EBIT $1.28B, Optum Rx EBIT $1.72B, UnitedHealthcare EBIT $2.83B. Share repurchases reached $5B through 3Q26, equalling prior FY26 guidance. The results should further rebuild management credibility and reinforce expectations for consistent beats and raises. Rating Overweight, price target $529.