CVS Health Corporation (NYSE:CVS) is one of the most undervalued large cap stocks to invest in now. On January 28, Argus reduced its price target for CVS Health to $90 from $91 while maintaining a Buy rating. Despite a nearly 15% stock decline following the Centers for Medicare and Medicaid Services’ proposal for a flat 2027 Medicare Advantage reimbursement rate, the firm anticipates an upward revision before the final rate is set in April 2026. Argus suggested that even if the final increase falls short o ...

Core Viewpoint - UnitedHealth Group (NYSE: UNH) has shown a significant bullish technical signal with the formation of its first golden cross since July 2024, indicating potential recovery after a substantial earnings-driven decline [1][3]. Stock Performance - UNH stock has experienced a peak-to-trough decline of approximately 48%, trading around $287, down from highs above $550 in 2024 [2]. - The stock saw a sharp drop of about 20% in January 2026 following disappointing Q4 2025 earnings and a weaker outlook for 2026 [3]. Technical Indicators - The 50-day moving average recently crossed above the 200-day moving average, suggesting improving short-term momentum after a prolonged bearish trend [1][3]. - The $330–$350 price zone remains a critical resistance level that needs to be reclaimed for a sustainable trend reversal [4]. Financial Performance - UnitedHealth reported Q4 2025 revenue of $113.2 billion, which fell short of expectations by approximately $530 million [4]. - Although adjusted EPS of $2.11 met forecasts, the focus was on underlying weaknesses, particularly the 2026 revenue guidance projected at over $439 billion, significantly below the consensus of around $454 billion [5]. - This guidance indicates a rare year-over-year revenue decline from 2025's revenue of about $447.6 billion, challenging previous growth assumptions [6].

Core Insights - The expiration of enhanced Affordable Care Act subsidies in 2026 is leading to significant increases in health insurance premiums for retirees, exemplified by a Georgia couple facing a jump from $1,600 to $3,200 monthly, totaling nearly $39,000 more annually [1][2] - Many households, particularly those with middle incomes, may no longer qualify for financial assistance, as eligibility is limited to those earning no more than 400% of the federal poverty level [3] - Early enrollment data indicates a decline in Marketplace coverage, with approximately 22.8 million enrollees in January 2026, down from 24.16 million in January 2025, reflecting a loss of about 1.4 million enrollees year over year [4] Industry Impact - A KFF survey reveals that around 50% of Americans struggle with healthcare costs, leading one in three to defer coverage, while 40% of insured individuals express concerns about affording premiums [5] - The Urban Institute reports that 21 states have fewer insurers participating in the Marketplace, with major insurers like Aetna opting out, likely due to uncertainties surrounding the loss of subsidies and the potential for covering higher-risk customers [6]

Core Insights - Understanding the distinction between wellness visits and routine physical exams under Medicare can lead to significant cost savings for patients [1][5] Group 1: Medicare Coverage - Medicare Part B provides yearly wellness visits at no cost to patients, covering preventative and medically necessary services [1] - Routine physical exams are not covered by Medicare Part B, requiring patients to pay 100% of the cost [1][5] Group 2: Appointment Types - Wellness visits involve reviewing medical history, lifestyle information, and providing guidance on screenings, while routine physical exams are more comprehensive, including blood tests and physical examinations [2] - To ensure coverage, patients should focus on typical wellness visit components and avoid discussing unrelated medical issues that could incur additional charges [3] Group 3: Scheduling and Frequency - Wellness visits are covered only once every 12 months, and patients must wait at least 12 months after enrolling in Medicare Part B or after their initial preventive visit before scheduling a wellness visit [4]

Group 1 - Eli Lilly's stock performance is influenced more by new reports on GOP-1 clinical trials than by its earnings [1] - Alphabet is highlighted as a strong performer, with significant contributions from its products like Gemini, YouTube, and self-driving cars [2] - The healthcare sector is facing scrutiny from the president, particularly targeting companies in the healthcare chain [3] Group 2 - The drug distribution sector is criticized for high profits with minimal contributions to healthcare, with McKesson being implied as a key player [4] - Amazon's stock has become volatile, with earnings reports leading to significant fluctuations in its stock price [5] - The travel sector is mentioned as a focus for investment, despite recent underperformance [6]

Core Insights - Enrollment in Obamacare plans is projected to decline by over 1 million Americans in 2026 due to rising monthly premiums and the expiration of enhanced federal subsidies that were in place during the COVID-19 pandemic [1] Enrollment Data - The Centers for Medicare and Medicaid Services (CMS) reported that 23 million consumers signed up for individual health insurance coverage through the Marketplaces during the 2026 open enrollment period, with 15.8 million using HealthCare.gov and 7.2 million using state-based exchanges [2] - Enrollment as of mid-January 2026 was down approximately 1.2 million compared to the 24.2 million enrolled at the same time last year [4] Premium Costs - Average premium costs for subsidized Obamacare enrollees are expected to rise to $1,904 in 2026 from $888, according to KFF data [3] - KFF's analysis indicated that premium payments are anticipated to more than double on average in 2026, with about 25% of enrollees stating they would forgo health insurance if premiums doubled as expected [10] Effectuation and Disenrollment - The enrollment data includes automatic renewals and plan selections, which may not reflect actual enrollments as some consumers may choose not to pay for their plans [6] - Analysts predict that total enrollment in Obamacare plans will decrease as consumers react to higher premiums, potentially leading to significant disenrollment activity during the 90-day grace period [13]

Earnings Reports - Microsoft and Meta both beat expectations, with Meta increasing its CapEx spending to $17 billion, a 41% growth from last year [4] - Microsoft stock fell 10% post-earnings, while Meta's stock rose 10%, indicating differing market reactions despite similar news [5] - Meta's average revenue per user reached $16.56, up 16% year-over-year, marking 10 consecutive quarters of double-digit growth [9] - Microsoft continues to see solid growth in its cloud segment, but concerns arise about reaching a peak [10] - Tesla's earnings report showed declines in deliveries and production, with the stock initially rising but then fading [12] - Apple reported record sales with iPhone revenue exceeding $85 billion and services revenue surpassing $30 billion, but the stock declined due to perceived lack of investment in AI [16] Health Insurance Sector - UnitedHealth's stock dropped 20% after projecting a revenue decline in 2026, the first such decline in decades, influenced by proposed minimal increases in payment rates [18] - Other health insurance stocks also fell, with Humana down 21%, CVS down 14%, and Molina Healthcare down 8% [19] Travel and Leisure Industry - Royal Caribbean's stock rose 19% following stronger-than-expected guidance, indicating double-digit growth in revenue and earnings [21] - Southwest Airlines also saw a 19% increase in stock price, projecting a 300% rise in EPS for 2026 compared to 2025 [22] - The performance of these companies suggests underlying demand in the travel and leisure sector [23] Upcoming Earnings - Anticipation builds for Amazon and Alphabet's earnings reports, with a focus on Amazon's AWS performance and Alphabet's investment strategies in AI [24][27] - Other notable companies reporting include Uber, Qualcomm, and several pharmaceutical firms [28] Macro Economic Insights - The upcoming jobs data is expected to be significant, with previous reports showing only 50,000 jobs added, raising concerns about potential negative revisions [36] - Consumer confidence remains low, attributed to persistent inflation and rising prices affecting daily life [39][40] - The political landscape may further influence consumer perceptions of the economy, especially with midterm elections approaching [43]

Core Insights - UnitedHealth Group experienced a significant loss of approximately $60 billion in market value following the Centers for Medicare & Medicaid Services' proposed payment rates for 2027, which were only a 0.09% increase compared to the expected 5% [1] - The company's stock plummeted 19% in one day, marking its worst performance since April 2025 [1] Financial Performance - UnitedHealth's CEO projected a decline in 2026 revenue to around $439 billion, representing a 2% decrease from 2025, marking the first revenue contraction since 1989 [4] - The company reported adjusted earnings per share (EPS) of $2.11 for the fourth quarter, slightly above estimates, but this figure excluded a significant $1.6 billion after-tax charge related to a cyberattack and restructuring costs [4] Membership Trends - UnitedHealth is facing a substantial membership decline, with projections indicating a loss of between 1.3 million and 1.4 million members in its Medicare Advantage segment this year [5] - The company anticipates total membership losses of 2.3 million to 2.8 million, including expected losses of 565,000 to 715,000 Medicaid members and declines in commercial plans [8] - Despite the membership exodus, the company is strategically focusing on sustainable members by walking away from unprofitable business and repricing plans to prioritize margin recovery over top-line growth [8] Dependency on Medicare - UnitedHealth has become increasingly reliant on Medicare for revenue growth, with Medicare revenue now more than double that of private insurance revenue [7] - This dependency has turned into a vulnerability as government rates have stagnated, impacting the company's long-term growth prospects [7]

I first wrote about Molina Healthcare ( MOH ) in December 2025 highlighting the business dynamics and why I see the company as a strong investment opportunity amid weak market sentiment - you can read that articleI'm an IMC qualified contributor who's followed financial markets for 5 years and has worked professionally in primary investment research for over 2 years. I'm a generalist who enjoys researching businesses from a buttom's up angle with a deep interest in smaller under covered companies where ther ...

I first wrote about Molina Healthcare ( MOH ) in December 2025 highlighting the business dynamics and why I see the company as a strong investment opportunity amid weak market sentiment - you can read that articleI'm an IMC qualified contributor who's followed financial markets for 5 years and has worked professionally in primary investment research for over 2 years. I'm a generalist who enjoys researching businesses from a buttom's up angle with a deep interest in smaller under covered companies where ther ...