UnitedHealth (UNH) stock crashed on Thursday after the health insurance company revised its outlook in its latest earnings report. It now expects adjusted earnings per share to range from $26 to $26.50 in 2025. That’s nowhere close to Wall Street’s estimate of $29.74 for the year and a major decrease from its prior guidance of $29.50 to $30 per share.
UnitedHealth pins the lowered profit outlook on two things. The first is heightened care activity indications in its Medicare Advantage businesses, most notably from its physician and outpatient services. The second is unexpected changes in the profile of Optum Health members and a greater-than-expected impact from current and new complex patients due to Medicare funding reductions from the Biden administration.
UnitedHealth CEO Andrew Witty said, “UnitedHealth Group grew to serve more people more comprehensively but did not perform up to our expectations, and we are aggressively addressing those challenges to position us well for the years ahead, and return to our long-term earnings growth rate target of 13 to 16%.”
UNH Q1 Earnings & Stock Movement Today
UnitedHealth stock also suffered today as the company’s Q1 results missed estimates. It reported adjusted EPS of $7.20 on revenue of $109.6 billion. For comparison, Wall Street expected adjusted EPS of $7.30 on revenue of $111.54 billion.
With its revised outlook and Q1 misses, UNH stock dropped 20.33% in pre-market trading on Thursday. That’s a massive blow to its share price, which had increased 16.15% year-to-date.
Is UNH Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for UnitedHealth is Strong Buy based on 21 Buy ratings over the last three months. With that comes an average price target of $639.72, representing a potential 9.33% increase. These ratings and price targets will likely change as analysts update their coverage after today’s earnings.
