|

UnitedHealth Group stock recovers Wednesday despite raft of Wall Street downgrades

  • UNH stock advances gingerly off Tuesday's near 18% sell-off.
  • BofA cuts price target from $560 to $350, downgrades to Neutral.
  • Wall Street analysts cut price targets largely to between $350 and $400 but remain optimistic.
  • BofA analyst Gajuk foresees 2025 EPS between $21.00 and $23.63.

UnitedHealth Group (UNH) stock opened more than 2.5% higher on Wednesday following the previous session's staggering loss of 17.8%. The fallout from the largest private health insurer in the US suspending its guidance as it deals with higher than expected medical costs has sent shivers down the spines of institutional shareholders.

Alongside replacing its CEO on Tuesday with the board chair, UnitedHealth projected that it will return to growth in 2026 after dealing with this year's complications.

UNH fell from $378.75 to $311.38 on Tuesday, and much of Wall Street has met the sell-off with after-the-fact downgrades. The wider market advances narrowly on Wednesday as Wall Street banks continue to cut their prior calls for a US recession this year after US President Donald Trump agreed with China to lower extremely high tariffs over the weekend.

UnitedHealth stock news

Wall Street analysts, never ones to be left out, have lowered their price targets on UNH stock in swift unison. Bank of America (BofA) was particularly concerned about UnitedHealth's decision to reduce its 2025 guidance during its earnings call on April 17 before then suspending all guidance on Tuesday, May 13.

On April 17, when UNH experienced the advent of the current sell-off that has seen the share price dangle about 50% off its all-time high, the health insurer cut its earlier guidance for 2025 from a midpoint of $29.75 in adjusted earnings per share (EPS) to a midpoint of $26.25  — or a 12% decline.

BofA analyst Joanna Gajuk now interprets the suspension of guidance to adjusted EPS drifting another 10% to 20% lower from the previous trim. This would mean a range of $21.00 to $23.63 in adjusted EPS for the year.

“We view the decision to pull the 2025 guide as a combination of uncertainty around the prevalence and persistence of the higher [medical] utilization as well as giving the incoming CEO additional time to become comfortable around the 2025 guidance he is now responsible for,” Gajuk wrote in reference to incoming CEO and former Chair Stephen Hemsley.

Gajuk cut her price target on UNH stock from $560 to $350 and moved it from her Buy rating to a Neutral outlook. Other notable rejiggered price targets among analysts include:

  • Jefferies cuts target price to $400 from $530
  • Leerink Partners cuts target price to $355 from $520
  • Oppenheimer cuts target price to $400 from $600
  • Raymond James cuts to Market Perform from Strong Buy
  • Deutsche Bank cuts target price to $362 from $521
  • Morgan Stanley cuts price target to $374 from $563
  • Wells Fargo cuts target price to $351 from $677

It is important to keep in mind, though, that despite the lowered price targets across Wall Street research desks, many analysts still retain positive views on UnitedHealth moving forward. Keybanc, Baird Equity Research, Raymond James and Deutsche Bank, among others, all kept positive outlooks on the stock at this reduced price level.

UnitedHealth Group stock forecast: Trust the chart

Despite the major pain of Tuesday's sell-off, it was another win for traders who follow Fibonacci levels. Tuesday's extreme sell-off halted at the 161.8% Fibo extension near $313.

UNH daily stock chart

UNH daily stock chart with Fibonacci extension

If you followed the advice yours truly gave on May 9, you purchased UNH shares in the mid-$380s, calling yourself lucky to buy a safe, dividend growth stalwart at four-year lows. If instead, you noted that there was no nearby supportive structure until the Fibo extension kicked in at $313, you made a wise decision. UNH stock halted at $309.10 and closed at $311.38. Let that be a lesson for all of us — trust the chart over your gut.

On the downside, the next Fibo extension sits way down at $197.78, while the upside features the $384.51 level at the 100% placeholder and the 78.6% Fibo at $409.21.

Author

Clay Webster

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

More from Clay Webster
Share:

Editor's Picks

GBP/USD holds range near 1.3500 after UK Q2 GDP

GBP/USD keeps its range near the 1.3500 psychological mark in the European session on Thursday. The mixed UK GDP and industrial data failed to inspire the British Pound. Meanwhile, the US Dollar stabilizes after the US CPI data-led sell-off, checking any upside attempts in the pair.

EUR/USD flatlines above 1.1500 as US Dollar stablizes ahead of PPI

EUR/USD is trading modestly flat above 1.1500 in European trading hours on Thursday. The pair stalls its rebound as the US Dollar consolidates losses incurred after the release of July's Consumer Price Index report. Inflation in the US moderated across a broad range of goods and services, cooling expectations for an aggressive Federal Reserve rate hike in September and weighing on the Greenback. The US PPI data is next in focus.

Gold weakens further below $4,400 as USD sticks to gains amid Fed bets, Iran tensions

Gold extends its intraday retracement slide from the highest level since June 5, around the $4,450 area touched earlier this Thursday, and slides further below the $4,400 mark heading into the European session. The initial market reaction to signs of moderating US inflation fades quickly as investors remain worried that higher energy prices will rekindle inflationary pressures.

XRP holds at make-or-break level, ADA and SOL risk 50-day EMA breakout

Top altcoins, including Ripple, Cardano, and Solana, are facing downside pressure, holding at crucial support levels. The technical outlook for XRP, ADA, and SOL indicates a mild bearish bias as downside pressure mounts.

Gold has priced a Fed pause. The hike is still coming
July inflation landed exactly where the consensus had it, on all four lines of the release, and Gold responded by adding around 1% and holding fast near $4,400/ounce, trading at its highest since early June. A print that surprises nobody is not supposed to move a metal that far.
Why is Crude Oil priced for a reopening the ships haven't made?
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.