UnitedHealth Stock Plunges Amid Forecast of Historic Revenue Drop

UnitedHealth Group, long considered one of Wall Street’s most steady growth engines, shocked investors this week with a forecast that wiped tens of billions of dollars from its market value. Shares of the healthcare giant tumbled nearly 20%, marking one of the steepest single-day declines in the company's history. The massive selloff was triggered by the company's projection that revenue will decline in 2026 for the first time in nearly four decades.

The pessimistic outlook follows a "disappointing" proposal from the U.S. government regarding 2027 Medicare reimbursement rates. While Wall Street expected an increase of up to 6%, the Medicare agency proposed a rate hike of just 0.09%, catching the insurer off-guard. This news sent shockwaves through the sector, dragging down competitors like CVS Health and Humana.

Compounding these regulatory pressures are significant legislative headwinds. UnitedHealthcare CEO Tim Noel revealed that the company expects to lose between 1.3 million and 1.4 million members. Executives attribute much of this contraction to the "One Big Beautiful Bill Act" (OBBBA), which has destabilized public-coverage markets by tightening eligibility and cutting Medicaid financing.

Despite the gloomy revenue forecast—projected to drop 2% to approximately $439 billion in 2026—UnitedHealth is attempting to reassure investors of a turnaround. For the fourth quarter of 2025, the company reported adjusted earnings of $2.11 per share, slightly beating estimates. However, net income plunged to just 1 cent per share after the company absorbed $1.6 billion in charges related to restructuring and the fallout from the Change Healthcare cyberattack.

CEO Steve Hemsley, who returned to lead the company last year following the departure of Andrew Witty, stressed that the company is returning to "financial rigor". Management insists that current divestitures and cost cuts are a necessary "reset" to place the company on steadier footing. While UnitedHealth targets a return to profit growth in 2026 with earnings per share expected to exceed $17.75, analysts warn that investors accustomed to steady growth may have to wait longer than hoped for a recovery.

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UnitedHealth’s stock fell 20% after saying it expects revenue to decline in 2026

UnitedHealth forecasts first revenue drop in nearly four decades; shares plunge

UnitedHealth is reeling from a nearly 20% stock rout after warning investors about its first revenue decline in decades

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UnitedHealth Stock Plunges

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