UnitedHealth shares fall as 2025 forecast misses estimates

(Bloomberg) — Shares of UnitedHealth Group Inc. fell by the most in four years on Tuesday after the insurance giant cut the top end of its 2024 forecast and issued a 2025 forecast that fell short of analysts' estimates remained behind.

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The company said it expects the high end of its 2025 adjusted earnings outlook to be about $30 per share. Analysts on average expected $31.16 per share, according to a Bloomberg survey.

Shares of UnitedHealth fell as much as 10.3%, their biggest intraday decline since March 18, 2020.

The company has rarely disappointed investors with forecasts that fall short of Wall Street views. Executives stressed that the targets were preliminary and they aimed to exceed them.

“We expect to take a more conservative approach than usual for 2025,” Chief Executive Andrew Witty said in a call with investors, noting that the company would provide detailed guidance in December.

Guide for 2024

The mean of UnitedHealth's new 2024 forecast was below analysts' average estimate. Adjusted earnings will be $27.50 to $27.75 per share in 2024, down 25 cents from the previous high end of the range, the company said Tuesday.

The new outlook includes a larger impact from a catastrophic hack on the company's Change Healthcare division than UnitedHealth had previously forecast. Some crisis response costs were not included in the adjusted results.

UnitedHealth, the first company in the group to report results, is considered a pioneer for the sector. Its shares were up 15% this year through Monday's close. Rival insurers including Elevance Health Inc., Humana Inc. and Centene Corp. fell less than 1% in early trading after UnitedHealth reported its results.

UnitedHealth's third-quarter 2024 adjusted earnings were $7.15 per share, compared to analysts' average estimate of $6.99. The healthcare giant's quarterly revenue was $100.8 billion, compared to analyst estimates of $99.2 billion.

The company's medical loss ratio, a key measure of patient care spending, was 85.2%, worse than Wall Street's assessment. UnitedHealth cited pressure from Medicare, the U.S. health care program for the elderly.

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