UnitedHealth Group shares slid sharply Wednesday morning, touching a new 52-week low as investors reacted to mounting concerns over rising medical costs and weaker-than-expected earnings guidance.
The stock dropped to $416.75 in early trade, extending a recent losing streak and reflecting broader uncertainty across the health insurance sector.
The selloff comes on the heels of UnitedHealth’s first-quarter earnings report, which missed Wall Street expectations on both profit and revenue. The company reported earnings per share of $7.20, falling short of analyst forecasts, with revenue totaling $109.6 billion-about 2% below consensus estimates.
Executives also lowered full-year earnings guidance, now projecting a midpoint of $26.25 per share, down from the previous $29.75.
Chief Executive Andrew Witty attributed the disappointing results to unexpectedly high medical costs, particularly in the company’s Medicare Advantage business. “We are seeing elevated utilization of outpatient services and physician visits among our Medicare Advantage members,” Witty said during the earnings call. “While our core business remains strong, these trends have impacted our near-term outlook.”
The announcement triggered a wave of analyst downgrades and price target reductions. Several major brokerages, including RBC Capital Markets and TD Cowen, cited ongoing cost pressures and uncertainty around Medicare reimbursement rates as reasons for their more cautious stance. The negative sentiment spilled over to other health insurers, with shares of Elevance Health, Humana, and CVS Health also trading lower in early action.
Despite the recent volatility, some analysts note that UnitedHealth’s fundamentals remain solid. The company has maintained a steady dividend, boasts a strong balance sheet, and continues to lead the industry in market share. Technical indicators, such as the Relative Strength Index, now suggest the stock is oversold, raising the possibility of a short-term rebound if sentiment stabilizes.
Industry experts say the latest dip in UnitedHealth shares reflects broader challenges facing health insurers in 2025, including rising healthcare utilization, regulatory uncertainty, and shifting demographics. As the company works to address these headwinds, investors will be watching closely for signs of stabilization and renewed growth in the quarters ahead.
For now, UnitedHealth Group’s stock remains under pressure, serving as a bellwether for the sector as it navigates a rapidly changing healthcare landscape.
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