Wall Street analysts downgrade UnitedHealth after guidance removal

Sam Boughedda

Wed, May 14, 2025, 6:21 AM 1 min read

Investing.com -- UnitedHealth Group shares came nether renewed unit aft the institution unexpectedly withdrew its 2025 net guidance and announced a enactment transition, prompting downgrades from Bank of America and Raymond James.

“We are downgrading UNH to Market Perform,” Raymond James wrote, citing the operation of “expected” CEO turnover and the “unexpected” determination to wantonness guidance conscionable 1 period aft lowering it.

Andrew Witty is stepping down arsenic CEO, with erstwhile main Stephen Hemsley returning to the role.

The institution had already chopped its 2025 forecast by 12% successful April but pulled the outlook wholly connected Monday, arsenic Medicare Advantage (MA) outgo trends worsened.

“UNH suspended 2025 guidance… owed to MA inclination not lone getting importantly worse… but present besides spreading to much analyzable patients similar duals,” Bank of America said, downgrading the banal to Neutral from Buy.

BofA lowered its terms people connected UnitedHealth (NYSE:UNH) to $350 from $560, citing some reduced net estimates and a little valuation multiple.

The slope said the institution whitethorn look “flat/negative MA subordinate growth” successful 2026 arsenic it focuses connected restoring margins.

Raymond James echoed those concerns, cutting its 2025 EPS estimation to $22 from $26.25 and calling visibility for the remainder of 2025 “very low.”

Raymond James analysts besides warned that UNH indispensable “pass the Stars trial successful October” and said muted rank maturation is apt successful 2026.

Shares of UnitedHealth fell 18% connected the time of the announcement and are down 38% year-to-date. “In short, it volition beryllium awhile until the fume clears,” Raymond James wrote.

Both firms pointed to valuation compressions, with BofA noting the banal present trades astatine astir 14x net versus its humanities 19x multiple.

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