Shares of UnitedHealth Group (UNH) dropped almost 5% in premarket trading on Tuesday after the company missed second-quarter earnings estimates and issued weak profit guidance. The health insurance giant posted Q2 earnings per share of $4.08, below Wall Street’s forecast of $4.45.
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UnitedHealth’s Q2 Performance
In the second quarter, UnitedHealth reported revenue of $111.62 billion, slightly surpassing the expected $111.59 billion.
Among its segments, UnitedHealthcare, the health benefits division of UnitedHealth Group, posted second-quarter revenue of $86.1 billion, marking a 17% year-over-year rise. Meanwhile, the company’s health services arm, Optum, generated $67.2 billion in Q2 revenue, up 6.8% from a year ago. However, revenue at Optum Health declined 7% to $25.2 billion, driven by changes to legacy client contracts and reduced Medicare Advantage funding.
UnitedHealth Cuts 2025 Outlook
UnitedHealth released a more cautious full-year outlook after pausing its forecast in May, aiming to offer investors clearer guidance amid uncertainty. The company said its revised guidance takes into account the company’s performance in the first half of 2025 and incorporates both realized and anticipated increases in medical care costs for the rest of the year.
For 2025, UnitedHealth forecasts revenue between $445.5 billion and $448 billion. Meanwhile, net earnings are projected at $14.65 per share and adjusted earnings of at least $16.00. Additionally, the company anticipates a return to earnings growth in 2026.
Is UNH a Good Buy Right Now?
According to TipRanks’ consensus, UNH stock has a Moderate Buy consensus rating based on 18 Buys, five Holds, and one Sell assigned in the last three months. At $348.12, the average UnitedHealth stock price target implies a 23.4% upside potential.
However, it’s important to note that these ratings could change following today’s earnings report.
