Key Stats for UnitedHealth Stock
- Today’s Price Change: -11%
- Current Share Price: $274
- 52-Week High: $631
- UNH Stock Price Target: $458
What Happened?
UnitedHealth (UNH) stock plunged 11% on Thursday after The Wall Street Journal reported that the Department of Justice is conducting a criminal investigation into the healthcare giant over possible Medicare fraud.
According to the report, which cited people familiar with the matter, the DOJ is focusing on UnitedHealth’s Medicare Advantage business practices. However, the exact nature of the potential criminal allegations remains unclear.
In response to the report, UnitedHealth Group issued a statement claiming the Justice Department has not notified the company about any such probe, calling the newspaper’s reporting “deeply irresponsible.”
The company added, “We stand by the integrity of our Medicare Advantage program.” This marks the second time this year that UnitedHealth’s Medicare Advantage business has come under federal scrutiny, following a February Wall Street Journal report about a civil DOJ investigation into whether the company inflated diagnoses to trigger extra payments.
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What the Market Is Telling Us
The severe selloff in UNH stock reflects growing investor concern about its mounting challenges and regulatory risks.
UnitedHealth shares have now lost approximately half their value this year following a string of setbacks, including a historic cyberattack, higher-than-expected medical costs, the shocking murder of UnitedHealthcare’s CEO Brian Thompson, and most recently, the surprise exit of CEO Andrew Witty.
The latest plunge is significant given UnitedHealth’s previously stable position as a healthcare industry leader.
Mizuho health-care equity strategist Jared Holz noted that UnitedHealth Group has lost over $300 billion of its $600 billion market cap in just one month, adding there is “some risk that the company will be removed from the Dow Jones Industrial Average at some point unless there is greater evidence of greater consistency.”
The market’s reaction suggests investors fear potential severe financial and reputational consequences if criminal charges are eventually brought against the company.
UnitedHealthcare’s Medicare and retirement segment, which includes the Medicare Advantage business, was the company’s largest revenue driver last year, with sales of $139 billion.
Any regulatory actions affecting this division could substantially impact UNH stock’s future performance and the company’s overall financial health.
Investors appear to be reassessing the risk profile of what was once considered one of the most stable blue-chip stocks in the healthcare sector.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
