Oscar Health shares rallied sharply on Thursday, climbing as much as 15.5% to $23.68 after Wells Fargo dropped its bearish stance on the health insurer. The upgrade came as the bank signaled greater comfort with the company's near-term outlook in the individual health-exchange market.
Wells Fargo analyst Stephen Baxter raised his rating on Oscar Health from Underweight to Equal Weight, a neutral call, and more than doubled his price target to $20 from $11. The move reflects a reassessment of the 2026 Affordable Care Act exchange landscape, which Baxter now views as less stressed than previously feared.
The stock finished at $20.50 on Wednesday before the upgrade sparked heavy buying. Volume surpassed 7.5 million shares, well above average, as traders bet on near-term stability in the exchange business. Despite the rally, the shares traded above the new $20 target, suggesting investors are pricing in additional upside.
Oscar Health's fortunes are closely tied to the ACA marketplace, where individual health plans are purchased. The Centers for Medicare & Medicaid Services reported 23.1 million enrollees in the 2026 open-enrollment period, a 5% decline from 2025. Any signal of steady enrollment or claims trends can move the stock, and Baxter's upgrade provided that catalyst.
The upgrade outpaced broader gains in managed-care stocks. Centene rose 5.3%, Elevance finished 4.6% higher, and UnitedHealth gained 4.9%. The SPDR S&P 500 ETF edged up about 0.5%, while the Nasdaq-100 ETF was slightly lower.
Oscar Health's first-quarter earnings, reported on May 6, had already reset investor expectations. Revenue surged to $4.65 billion from $3.05 billion a year earlier, while net income attributable to Oscar jumped to $679.0 million from $275.3 million. Membership climbed to 3.17 million from 2.04 million, and the medical loss ratio improved to 70.5% from 75.4%.
Baxter's analysis focused on Florida, where Oscar generates about 64% of its premiums. While membership in the state fell 13.5% year over year, medical loss ratios improved by 370 basis points. Baxter noted potential conservatism in risk adjustment, the ACA mechanism that redistributes funds among insurers based on member risk.
Governance changes also drew attention. Oscar Health held its 2026 annual meeting on Thursday, where shareholders voted on board nominees, executive compensation, and auditor ratification. Siddhartha Sankaran assumed the role of independent chair, a move announced in April. Separately, co-founder Mario Schlosser stepped down as president of technology and CTO on June 1, transitioning to an advisory role focused on AI and digital health. His base salary is set at $370,000 with no annual bonus or new equity awards.
Risks remain. Enhanced premium tax credits are set to expire at the end of 2025, which could make coverage unaffordable for some and reduce marketplace enrollment and company membership after the 2026 enrollment period. Tighter program-integrity rules and other policy changes could also shrink the market, worsen member mix, and increase pressure from medical costs or risk-adjustment estimates.
For now, the upgrade has shifted sentiment, but the 2027 outlook remains uncertain. The focus will turn to claims data, enrollment trends, and whether other analysts follow suit with more positive revisions.
