UnitedHealth Group Stock Plunges 18% Amid CEO Exit, Guidance Withdrawal

On May 15, 2025, UnitedHealth Group's stock experienced a significant drop of 5.01% in pre-market trading, reflecting the market's response to recent developments within the company.

UnitedHealth Group's stock has been under intense pressure following the sudden resignation of its long-serving CEO, Andrew Witty. The company's decision to withdraw its 2025 financial guidance, citing an abrupt change in the operating environment due to surging medical needs, has further exacerbated market concerns. This move has led to a dramatic 18% drop in the company's stock price, marking the largest single-day decline since 2011.

Analysts from major financial institutions have revised their ratings and price targets for UnitedHealth Group in light of these developments. American Bank, for instance, downgraded the stock from "buy" to "neutral," slashing its target price from $560 to $350. The bank's analyst, Joanna Gajuk, anticipates that the company's earnings per share for 2025 could be 10-20% lower than previously forecasted, with a potential reduction of 21-29% compared to its long-term targets.

The company is now in the process of formulating a new bidding strategy to restore a 3-5% operating profit margin in its Medicare Advantage (MA) segment. However, this could come at the cost of stagnant or declining membership growth. The abrupt departure of the CEO has raised questions about the company's strategic direction and its ability to navigate the challenges posed by rising medical costs.

In addition to the management turmoil, UnitedHealth Group is also facing a criminal investigation by the U.S. Department of Justice. The investigation, which began last summer, is focused on potential fraudulent activities related to medical insurance. The company has not yet commented on the investigation, which adds another layer of uncertainty to its future prospects.