UnitedHealth’s Sharp Sell-Off Has Wall Street Divided

UnitedHealth ( (UNH) ) has fallen by -18.40%. Read on to learn why.

UnitedHealth shares have endured a bruising week, sliding about -18.40% as investors digested a weaker outlook and fresh regulatory worries. The stock’s sell-off accelerated after management issued a softer revenue guide for 2026 and the Centers for Medicare & Medicaid Services (CMS) proposed a much lower‑than‑expected 2027 Medicare Advantage payment update—just 0.09% versus market hopes near 5%. That combination stoked fears about future margins and earnings growth in one of UnitedHealth’s key profit engines and led TD Cowen’s Ryan Langston to cut his price target to $311 and stay on the sidelines with a Hold rating.

Behind the market reaction is a tug‑of‑war between near‑term pressure and a still‑intact long‑term turnaround story. On the one hand, analysts note that the weak Medicare Advantage rate proposal and added “V29” risk‑adjustment changes cloud visibility on how quickly the Medicare and value‑based care businesses can rebound. UnitedHealth is also deliberately cutting unprofitable Medicare, Medicaid and commercial risk membership, which means millions fewer members in 2026 even as the company aims to protect and gradually rebuild margins. Segments like Optum Health are improving only slowly, with margins still well below management’s long‑term targets, reinforcing concerns that the recovery could take time.

On the other hand, most of Wall Street still sees the recent slide as overdone. UnitedHealth’s latest quarterly figures and its 2026 earnings guidance were broadly in line with expectations, with management targeting lower medical loss ratios and about 50 basis points of margin expansion next year as repricing and cost controls kick in. While a handful of high‑profile analysts, including BofA’s Kevin Fischbeck, remain Neutral, the broader consensus on the stock is Strong Buy, with average 12‑month targets clustered around the mid‑$380s to high‑$390s—far above the current share price. For investors willing to tolerate regulatory uncertainty and a bumpy near‑term outlook, the steep -18.40% drop in UnitedHealth this week is increasingly being framed as a potential entry point into a high‑quality health‑care leader trading at a discounted valuation.