What's Happening With UNH Stock?

Core Viewpoint - The rising medical costs and insurance premiums are causing significant public outrage, impacting UnitedHealth Group's stock performance and profitability [1][3]. Group 1: Financial Performance - UnitedHealth Group's adjusted net profit increased by 38%, from $18.2 billion in 2021 to $25.1 billion [1]. - The company's medical care ratio rose from 82.6% in 2021 to 84.9% in the last twelve months, indicating increasing costs [1]. - The earnings per share guidance for 2025 is set between $29.50 and $30.00, which is below the street expectations of $31.20 [3]. Group 2: Market Reaction - UNH stock has dropped 8% in a week due to public outrage over rising medical costs and insurance practices [1]. - Despite a strong performance in previous years, with returns of 45% in 2021, 7% in 2022, and 1% in 2023, UNH has struggled to consistently outperform the market [4]. Group 3: Legislative Impact - There are legislative efforts to force health insurance companies, including UnitedHealth, to divest their pharmacy businesses, which could negatively impact revenue [2]. Group 4: Valuation - The estimated valuation for UnitedHealth Group is $606 per share, slightly above the current market price of $565, based on a P/E ratio of 22x trailing adjusted earnings of $27.02 per share [5].