UnitedHealth Group (UNH) shares continued their downward trend in Thursday morning trading, breaching the $406 mark as investor concerns linger following the company’s recent financial disclosures.
The stock was recently trading around $404.23, reflecting a decline of approximately 1.75% for the day, pushing it closer to its 52-week low of $401.
This latest slide follows a period of significant volatility for the healthcare giant, triggered by its first-quarter earnings report released on April 17th.
While the company reported revenue growth, both earnings per share (EPS) and total revenue fell short of analyst expectations. UnitedHealth posted an adjusted EPS of $7.20 against a forecast of $7.29, and revenue of $109.58 billion missed the $111.53 billion consensus estimate.
The primary catalyst for the negative market sentiment was the company’s decision to slash its full-year 2025 profit forecast. UnitedHealth dramatically lowered its adjusted EPS guidance to a range of $26.00 to $26.50 per share, a significant reduction from the previously projected $29.50 to $30.00.
The company attributed this revision to two main factors: unexpectedly high medical costs driven by increased care utilization within its Medicare Advantage plans, particularly for physician and outpatient services, and unanticipated changes related to its Optum Health business affecting planned reimbursements.
The initial announcement led to the stock’s worst single-day performance in over 25 years, with shares plummeting around 19-22% on April 17th. The fallout extended across the health insurance sector, negatively impacting shares of competitors like Humana, CVS Health, and Elevance Health, as UnitedHealth is often seen as an industry bellwether.
CEO Andrew Witty acknowledged the performance issues, stating the company “did not perform up to our expectations” and affirming that management is “aggressively addressing those challenges.”
Despite the near-term setbacks and revised outlook, UnitedHealth aims to return to its long-term annual earnings growth target of 13% to 16% by 2026. However, the stock has struggled significantly in recent months, down roughly 24% over the last quarter and over 15% in the past year, reflecting the ongoing pressures from rising medical costs and reimbursement challenges within the Medicare Advantage market.