Wall Street analysts downgrade UnitedHealth after guidance removal

Investing.com -- UnitedHealth Group shares came under renewed pressure after the company unexpectedly withdrew its 2025 earnings guidance and announced a leadership transition, prompting downgrades from Bank of America (NYSE:BAC) and Raymond (NSE:RYMD) James.

“We are downgrading UNH to Market Perform,” Raymond James wrote, citing the combination of “expected” CEO turnover and the “unexpected” decision to abandon guidance just one month after lowering it. 

Andrew Witty is stepping down as CEO, with former chief Stephen Hemsley returning to the role.

The company had already cut its 2025 forecast by 12% in April but pulled the outlook entirely on Monday, as Medicare Advantage (MA) cost trends worsened. 

“UNH suspended 2025 guidance… due to MA trend not only getting significantly worse… but now also spreading to more complex patients like duals,” Bank of America said, downgrading the stock to Neutral from Buy.

BofA lowered its price target on UnitedHealth (NYSE:UNH) to $350 from $560, citing both reduced earnings estimates and a lower valuation multiple. 

The bank said the company may face “flat/negative MA member growth” in 2026 as it focuses on restoring margins.

Raymond James echoed those concerns, cutting its 2025 EPS estimate to $22 from $26.25 and calling visibility for the rest of 2025 “very low.” 

Raymond James analysts also warned that UNH must “pass the Stars test in October” and said muted membership growth is likely in 2026.

Shares of UnitedHealth fell 18% on the day of the announcement and are down 38% year-to-date. “In short, it will be awhile until the smoke clears,” Raymond James wrote.

Both firms pointed to valuation compressions, with BofA noting the stock now trades at about 14x earnings versus its historical 19x multiple.