UnitedHealth Group (NYSE: UNH), once considered a stalwart of the healthcare sector, is enduring one of the most dramatic stock declines in its history. Over the past six months, UNH shares have plummeted nearly 40%, erasing billions in market value and shaking investor confidence in what was long viewed as a defensive, blue-chip holding.
The downturn has been driven by a confluence of adverse events and operational headwinds. The company’s troubles began to accelerate in mid-April, when UnitedHealth reported its first earnings miss in over 15 years and subsequently slashed its profit forecast for 2025.
By May, the company withdrew its full-year guidance altogether, citing surging medical costs—particularly in its Medicare Advantage business—and an unexpected spike in high-acuity patient volumes. These rising expenses have squeezed margins and raised questions about UnitedHealth’s ability to manage risk in a volatile healthcare environment.
Compounding these financial challenges, UnitedHealth has faced a series of reputational and regulatory crises. The abrupt resignation of CEO Andrew Witty in May, following months of mounting investor pressure and operational upheaval, further rattled the market.
Witty’s departure came on the heels of a cyberattack on the company’s Change Healthcare unit, ongoing antitrust investigations by the Department of Justice, and a shareholder lawsuit linked to the December 2024 shooting of a top executive. Allegations of secret payments to nursing homes and fresh reports of Medicare fraud have only deepened investor unease.
Despite the steep selloff—UNH is down more than 40% year-to-date, far underperforming both the S&P 500 and its industry peers—analyst sentiment remains cautiously optimistic for the long term. The stock is now trading at its lowest earnings multiple in five years, and some analysts project a potential rebound, with average price targets ranging from $365 to $548, suggesting significant upside if the company can stabilize operations and restore investor trust.
UnitedHealth’s new leadership, under returning CEO Stephen Hemsley, faces the urgent task of regaining credibility, addressing regulatory scrutiny, and navigating ongoing cost pressures. For now, the stock’s dramatic decline stands as a stark reminder of the risks inherent even in the most established healthcare giants.
