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The share price plummeted in one fell swoop after another
Since the beginning of the year, a chain of negative events has caused the share price to plummet by 41%: High Medicare spending and skyrocketing costs for GLP-1 drugs led to a profit warning in April and the surprise CEO change from Andrew Witty to Stephen Hemsley in May. Added to this is Trump's "Big Beautiful Bill", which provides for one trillion dollars in cuts to Medicaid and "Obamacare" from 2026. As a result, the industry will lose up to 12 million policyholders, which will have a negative impact on premium volume (currently around 15% of Group revenue). In the short term, the new management can tackle many operational problems, but structurally, demographic pressure, expensive specialty therapies and political intervention are hampering profit growth.
Since the beginning of the year, a chain of negative events has caused the share price to plummet by 41%: High Medicare spending and skyrocketing costs for GLP-1 drugs led to a profit warning in April and the surprise CEO change from Andrew Witty to Stephen Hemsley in May. Added to this is Trump's "Big Beautiful Bill", which provides for one trillion dollars in cuts to Medicaid and "Obamacare" from 2026. As a result, the industry will lose up to 12 million policyholders, which will have a negative impact on premium volume (currently around 15% of Group revenue). In the short term, the new management can tackle many operational problems, but structurally, demographic pressure, expensive specialty therapies and political intervention are hampering profit growth.
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@Smudeo I know, but Mecicaid is only 15% of United Health's turnover and therefore also leads to a possible increase/shift in private insurance. Apart from that, it would not be completely canceled. I am relatively relaxed about this and have already priced in a lot of negative news. ✌️Diese news are all already known and included in the share price. Everyone has to decide for themselves, but I like the risk/reward ratio here very much.
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@BamBamInvest United Health and Elevance
The next important milestone is the Q2 figures on July 29, for which another profit slump is expected. The old and new CEO Hemsley, who already led the company from 2006 to 2017, must now achieve his confirmed medium-term target of profit growth of 13 to 16% per year despite regulatory and cost-related headwinds. The extremely successful technology and data subsidiary Optum will help with this. However, just like its most comparable competitor Elevance, UnitedHealth will have to find an answer to the question of how higher costs due to more expensive treatments (keyword: gene therapy and GLP-1 drugs) can be absorbed with simultaneous cutbacks in the healthcare sector.
The next important milestone is the Q2 figures on July 29, for which another profit slump is expected. The old and new CEO Hemsley, who already led the company from 2006 to 2017, must now achieve his confirmed medium-term target of profit growth of 13 to 16% per year despite regulatory and cost-related headwinds. The extremely successful technology and data subsidiary Optum will help with this. However, just like its most comparable competitor Elevance, UnitedHealth will have to find an answer to the question of how higher costs due to more expensive treatments (keyword: gene therapy and GLP-1 drugs) can be absorbed with simultaneous cutbacks in the healthcare sector.
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•@Smudeo I'm aware of all that, you're copying articles and reports into here now 😁. I've read everything, take a look at the price drop, it's all already clear, forecasts have been suspended and headwinds are to be expected. It's also clear that the sector is under pressure, what exactly are you trying to tell me? We will see the effects this year and how this will be reflected in the results. We will find out more on 29.07. ☺️
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@BamBamInvest I just want to say that this is not an investment - there are better stocks - sectors - unfortunately many have already fallen for it here in recent months
The valuation premium that investors have so far accorded UnitedHealth compared with the rest of the sector could prove to be an additional burden in this environment. Elevance, also a traditional health insurer with national reach and recently also active in the digitalization business with a subsidiary (Carelon), has only lost a good 6% in value since the beginning of the year, but is valued significantly lower and, like UnitedHealth, currently at a discount to the 12-month forward P/E ratio (currently: 9; average: 14). However, the entire sector is burdened by the higher short-term risks and an investment in any of the competitors is currently not recommended.
The valuation premium that investors have so far accorded UnitedHealth compared with the rest of the sector could prove to be an additional burden in this environment. Elevance, also a traditional health insurer with national reach and recently also active in the digitalization business with a subsidiary (Carelon), has only lost a good 6% in value since the beginning of the year, but is valued significantly lower and, like UnitedHealth, currently at a discount to the 12-month forward P/E ratio (currently: 9; average: 14). However, the entire sector is burdened by the higher short-term risks and an investment in any of the competitors is currently not recommended.
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•@Smudeo This may be true and correct in the short term, but it could also offer a good entry point. We will see, today $ELV figures are coming out, which will certainly rub off, let's see what the management says about the prospects and costs. $ELV also has about 25% of Medicare, which is almost twice as high as $UNH. You always have to put this into perspective. For <security:n/a:US60855R1005> just under 80% and $CNC over 50% share, this certainly causes more pain and headwinds.
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@BamBamInvest @Smudeo Elevance Health's figures are coming out today, I think it might look the same for UNH... I'm curious
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•@Doe It will be particularly interesting to see how $UNH reacts. Weak prospects of a further sell-off or no reaction. Psychologically, I believe there will be further uncertainty among investors. Let's see, but they have almost twice as much of a 25% stake in Medicaid as $UNH. Do you know when the numbers are coming, have you looked ?
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@BamBamInvest Q2 2025 Earnings this Morning
17. Juli 2025, 06:00
17. Juli 2025, 06:00
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•@Doe does that mean 12:00 noon for us? They report that early ? 😂
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