UnitedHealth drags rivals as 2025 outlook disappoints
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UnitedHealth (NYSE:UNH) shares sold off Tuesday morning after the industry bellwether set the upper end of its 2025 earnings outlook below Wall Street’s expectations, dragging its managed care rivals.
While the insurance giant provided in-line 2024 guidance with its Q3 2024 results in the premarket, its CEO Andrew Witty noted during the earnings call that the company’s 2025 adjusted profit could be $30 per share.
Consensus forecasts indicate that UnitedHealth’s (UNH) 2025 earnings will be $31.17 per share.
Witty said UNH is setting the forecast “more conservatively than is typical” due to Medicare and Medicaid-related impacts on its insurance unit, UnitedHealthcare.
He attributed his downbeat view to the impact of payment cuts to the Medicare program, the Inflation Reduction Act, and a mismatch between the Medicaid rates and medical benefits. “The majority of those 2025 factors are expected to be most impactful to the UnitedHealthcare businesses,” Witty added.
Notable decliners include Elevance Health (ELV), Humana (HUM), Molina Healthcare (MOH), Centene (CNC), CVS Health (CVS), and Alignment Healthcare (ALHC).
Earlier in the day, UnitedHealth (UNH) reported better-than-expected financials for Q3, even as its Optum unit stagnated and cost concerns hurt operational earnings in UnitedHealthcare.