UnitedHealth's stock doesn't offer much value, says Raymond James' John Ransom

Financial Performance & Valuation - UnitedHealth's earnings starting point this year is expected to be in the $18-20 range per share [6][7] - Raymond James estimates UnitedHealth could potentially claw back to $30 per share of earnings in a couple of years, but the stock is considered 30-40% more expensive than similar stories [5] - Medicare Advantage is now considered a 1-2% margin business [10][12] - Other health insurers like Humana (6 PE) and CVS (8 PE) are considered cheaper ways to play the recovery in Medicare Advantage [5] - Elevance is trading under 10 times earnings, making it a potentially more attractive valuation [7] Business Strategy & Challenges - UnitedHealth has an opportunity to reset its strategy, particularly regarding its $60 billion Optimum Health business, where it takes risk for itself and competitors [9] - The company needs to reassess whether taking risk for competitors like Humana in Medicare Advantage, and potentially losing money, makes sense [10] - An ongoing investigation could lead to behavior changes, such as less aggressive coding and less stringent prior authorizations, which could impact earnings in the 1-2% margin Medicare Advantage business [12] Market Dynamics & Competitive Landscape - UnitedHealth has a diversified franchise across different lines of business, including a strong commercial franchise and Optimum business [2] - Other insurers like Cigna, with less government exposure, are preferred by some [7]