synopsis
Multiple brokerages downgraded UnitedHealth Group Inc. (UNH) over the last two days after the health insurer reported downbeat first-quarter earnings and lowered its full-year guidance in light of higher-than-expected costs.
UnitedHealth said on Thursday that it expects an increase in costs from its Medicare Advantage businesses in 2025, higher than planned and consistent with the elevated levels in 2024.
It subsequently lowered its full-year adjusted earnings per share (EPS) guidance to between $26 and $26.50, down from its previous forecast of $29.50 to $30.
KeyBanc lowered its price target on UnitedHealth to $575 from $650 on Monday, while maintaining an ‘Overweight’ rating on the shares.
The firm stated that the company's first-quarter (Q1) update was very disappointing, with Medicare Advantage (MA) once again being the Achilles' heel.
KeyBanc thinks the issues are mostly specific to UnitedHealth and are fixable for 2026.
The silver lining it sees is that UnitedHealth identified these pressures early in the year, allowing the company to improve risk adjustment factor coding for 2026 and factor the higher utilization into June bids.
Meanwhile, Barclays lowered the firm's price target on UnitedHealth to $560 from $642 on Monday, while maintaining an ‘Overweight’ rating on the shares.
UBS lowered its price target on UnitedHealth to $525 from $612 on Sunday and maintained a ‘Buy’ rating on the shares.
However, UBS expects a recovery for UnitedHealth in 2026 at the high end of long-term guidance, given the "depressed results" this year and the actions being taken.
There is a "recovery path" as UnitedHealth takes appropriate actions to repair the business and has time to readjust benefits as needed to return to long-term growth, the firm said.
For the first quarter, UnitedHealth’s adjusted EPS came in at $7.20, up from $6.91 in the first quarter of 2024, but below an expected $7.29. CEO Andrew Witty stated that the company did not perform up to its expectations.
On Stocktwits, retail sentiment around UnitedHealth remained in the ‘extremely bullish’ territory over the past 24 hours while message volume remained at ‘extremely high’ levels.

UNH stock is down by about 12% so far this year and by about 9% over the past 12 months.
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