UnitedHealth (UNH) disclosed a major leadership change, as CEO Andrew Witty stepped down for personal reasons. The health insurance giant also suspended its 2025 outlook, causing UNH stock to drop over 10% in premarket trading, which reflects investors unease over uncertain financial estimates. However, the company is optimistic about growth in 2026.
Protect Your Portfolio Against Market Uncertainty
- Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter.
- Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox.
Key Changes in Leadership and Outlook
It must be noted that UNH’s chairman, Stephen Hemsley, will take over as CEO effective immediately. Hemsley previously led the company from 2006 to 2017 and will continue serving as chairman of the board. Witty will remain involved as a senior adviser.
Upon his reappointment, the 72-year-old Hemsley pledged to return the company to its “long-term growth objective of 13 to 16%.”
This move echoes similar instances where companies facing headwinds have turned to their former leaders, such as Howard Schultz‘s return to Starbucks (SBUX) and Bob Iger’s recent comeback at Disney (DIS).
Regarding the suspension of the 2025 outlook, UnitedHealth said it is due to higher-than-anticipated medical costs related to several new Medicare Advantage beneficiaries.
Challenging Period for UNH
This leadership and outlook revision comes after a challenging period for UnitedHealth. The company faced tough times after a top executive was killed in December, causing online backlash against the U.S. healthcare system.
Also, in April, the company cut its annual forecast and missed earnings for the first time in over 10 years, causing its stock to drop 23% in one day.
Further, the shift also comes amid legal challenges, such as a shareholder lawsuit over its handling of backlash from the top executive’s killing. Despite these hurdles, UNH expects to return to growth in 2026, with a focus on lowering costs and improving efficiency.
Is UNH a Good Buy Right Now?
Turning to Wall Street, UNH stock has a Strong Buy consensus rating based on 22 Buys and three Holds assigned in the last three months. At $559.13, the average UnitedHealth stock price target implies a 47.63% upside potential.
