The first choice for safe haven under the tariff policy! Investment bank Baird gave United Health (UNH.US) and Alignment Healthcare (ALHC.US) “outperform the market” ratings

The Zhitong Finance App learned that investment bank Baird listed United Health (UNHUS) and Alignment Healthcare (ALHC.US) as their top two safe-haven preferred stocks, stressing that managed healthcare companies can withstand the impact of the Trump administration's tariff policy.

“The logic is simple,” Baird analyst Michael Ha pointed out in the report. Since the industry mainly relies on domestic revenue and the business focuses on the Federal Medicare Priority Prescription Drug Program (MAPD) and the Medicare Part D Prescription Drug Program, the managed care sector is largely unaffected by the threat of tariffs.” We expect the company to exceed expectations in the first quarter, but we believe that management will not raise full-year guidance. Considering the policy changes and macroeconomic headwinds that may occur in Part D this year, the company will maintain a conservative attitude towards 2025 performance expectations.”

Baird gave United Health and Alignment Healthcare a “outperforming market” rating. The former target price was set at $640, while the latter price target was raised from $17 to $22 per share. The agency maintained a “neutral” rating for Humana (HUM. US), but raised the target price from $270 to $300, stating that if Humana can properly handle the 2026 star rating lawsuit and obtain favorable results in the 2027 rating, it will consider upgrading it to a preferred stock.

CVS Health (CVS. US) also received a “neutral” rating, and the target price was raised from $51 to $71 per share.” “We used a valuation multiple of 1 times that of CVS's five-year historical peak price-earnings ratio,” Ha explained. “This not only reflects our judgment on CVS's potential profitability, but also includes a moderate discount for the next 1-2 quarters.”

Despite maintaining the “outperforming market” rating, Baird lowered the Cigna (CI. US) target price from $388 to $362, citing the company's higher exposure to unemployment in a recessionary context and a lack of impact from government health insurance business buffering policies.

In view of Medicaid policy risks, Baird downgraded the ratings of Molina Healthcare (MOH.US), Elevance Health (ELV.US), and Centene (CNC .US) from “outperforming the market” to “neutral,” and adjusted the target prices to $375, $529, and $69 (originally $331/625/71), respectively. Based on the same policy considerations, the agency also downgraded the ratings of Tenet Health (THC.US), Global Health Services (UHS.US), and HCA Health (HCA .US) from “outperforming the market” to “neutral,” and adjusted the target price to $137/224/336 (originally $153/274/396), respectively.

“Although the fundamentals are solid, we believe that until policy uncertainty is resolved, these stocks will not be favored by incremental capital,” the analyst wrote in the report.