UnitedHealth Group (UNH), a key player in the health insurance sector, is set to release its second-quarter earnings on July 29. As anticipation builds for the Q2 results, several financial analysts have reaffirmed their Buy rating on UNH stock, though they have revised their price targets downward. Deutsche Bank, in a recent update, adjusted the price target for UnitedHealth from $362 to $328 while maintaining its Buy rating.
Analyst George Hill from Deutsche Bank expressed concerns that investor sentiment has declined significantly due to various negative news surrounding the company and broader challenges in the industry. One of the main issues highlighted is the difficulties facing Optum Health, UnitedHealth’s healthcare services division, which continues to be a focal point for investors.
Year-to-date, UNH stock has faced substantial turbulence, dropping 44%. Factors contributing to this decline include the unexpected exit of the CEO, the withdrawal of full-year guidance due to escalating costs in the Medicare Advantage segment, and an ongoing investigation by the Department of Justice into the company’s billing practices.
Similarly, Whit Mayo from Leerink Partners has also adjusted his price target for UNH, reducing it from $355 to $340 while retaining a Buy recommendation. Mayo pointed out that expectations have been gradually weakening over the past month. However, he remains “cautiously optimistic,” suggesting that if the company reinstates its 2025 earnings per share guidance of $18 to $19, it could alleviate some concerns regarding diminishing margins.
Wall Street analysts anticipate UnitedHealth will post earnings per share of $4.59 for Q2 2025, marking a more than 33% decrease compared to the previous year. The general outlook remains mixed but leans towards cautious optimism, with 18 analysts recommending Buy, five Hold, and one Sell, leading to an average price target of $356.36, reflecting a potential upside of 25% from current prices.
Despite the challenges ahead, analysts believe there is potential for recovery, reinforcing why some investors might view this as an opportunity for long-term gains.