Morgan Stanley expects UnitedHealth (UNH) shares to fall following an “unexpected call out” of higher than anticipated Medicare Advantage utilization that prompted the company to reduce its 2025 EPS guidance range by 12% to $26.00-$26.50 from $29.50-$30.00, which is “well below” the firm’s pre-call forecast of $29.85 and FactSet consensus at $29.72. Management’s commentary around lowered FY25 EPS was “the real takeaway” and it is setting a negative tone for the MA group, including peers Humana (HUM), CVS Health (CVS) and Elevance Health (ELV), added the analyst. Morgan Stanley has an Overweight rating and $664 price target on UnitedHealth shares in advance of the company’s earnings conference call.
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