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Key Takeaways
- UnitedHealth Group's outlook cut Thursday has raised concerns about its insurance peers, with several set to report earnings in the coming weeks.
- The company’s first-quarter results missed estimates. This was due to higher than expected medical costs among Medicare plan holders.
- Jefferies analysts said Thursday that UnitedHealth's "peers are in trouble" if the company's issues are applicable to insurance rivals.
UnitedHealth Group (UNH)’s Thursday outlook cut has raised concerns for its insurance competitors, as several are due to report earnings in coming weeks.
The company, on Thursday, reported first-quarter earnings that missed expectations and cut its forecast for profit for 2025. They cited higher than expected medical costs for Medicare enrollees.
UnitedHealth expected claims in its Medicare Advantage business to rise at a similar rate to 2024, but CEO Andrew Witty said in Thursday’s earnings call that “indications suggest care activity increased at twice that rate,” according to a transcript from AlphaSense.
Jefferies analysts stated Thursday that UnitedHealth “peers” are in trouble if the bellwether issues are applicable to insurance competitors. The analysts noted that it’s possible UnitedHealth had “expectations that were materially more aggressive than peer companies.”
UnitedHealth shares dropped by over a fifth on Thursday in their worst day for decades. Humana (HUM), Elevance Health, CVS Health, and CVS Health all suffered losses.
Elevance is scheduled to report earnings on Tuesday. Humana is scheduled to release its results the following Wednesday, with CVS's report due a day later.
