Raymond James' John Ransom: UnitedHealth will now trade closer to an industry multiple
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Yahoo
19 hours ago
- Yahoo
UnitedHealth replaces CFO in another leadership shakeup
This story was originally published on Healthcare Dive. To receive daily news and insights, subscribe to our free daily Healthcare Dive newsletter. Dive Brief: UnitedHealth announced on Thursday it will replace its CFO, another significant executive change for the healthcare behemoth as it mounts a financial turnaround. Wayne DeVeydt, most recently a managing director and operating partner at investment firm Bain Capital, will take up the CFO role on Sept. 2, according to a press release. John Rex, the company's CFO since 2016, will become a strategic advisor to CEO Stephen Hemsley, who returned to the top job in May after UnitedHealth's previous CEO stepped down. Dive Insight: DeVeydt will take up the job at UnitedHealth, which includes the nation's largest insurer as well as a major pharmacy benefit manager and large network of physicians, as the firm faces an array of challenges, including growing scrutiny over its business practices that increased after the head of its health insurance unit was killed in December. Last month, the healthcare giant confirmed it's under federal investigation from the Department of Justice over its Medicare program. The company also pulled its 2025 guidance this spring after posting first-quarter financial results that missed investor expectations. UnitedHealth's stock is trading about 50% less than it was at the start of the year, and the firm was recently downgraded by investment banks. The shakeup comes months after Hemsley, chairman of UnitedHealth's board of directors and a former head of the healthcare giant, replaced Andrew Witty as chief executive. Now, UnitedHealth is again shaking up its leadership at the top level by replacing Rex, who joined the firm in 2012 as CFO of its new Optum health services business. Before working at Bain, incoming CFO DeVeydt served as chairman and CEO of surgical facility operator Surgery Partners from 2018 to 2020. He'd also previously worked at insurer Anthem, now named Elevance, and consultancy PricewaterhouseCoopers, according to a press release. Earlier this week, UnitedHealth set new financial guidance for the year that fell below analyst expectations. The company now projects $16 in adjusted earnings per share between $445.5 billion and $448 billion in revenue. In the second quarter, the firm reported $111.6 billion in revenue, up 13% year over year, while profit declined 19% to $3.4 billion. Recommended Reading UnitedHealth expects lower profits in 2025 amid medical cost spike
Business Insider
a day ago
- Business Insider
With UnitedHealth Group (UNH) Stock Down Over 50%, Let's Look at Who Owns It
UnitedHealth Group (UNH) has had a rough ride in 2025. The stock is down over 56% year-to-date, hit by rising medical costs, a DOJ probe, executive changes, and now disappointing Q2 results. The company recently posted adjusted earnings per share of $4.08 on $111.6 billion in revenue, narrowly beating the revenue forecast but missing the EPS consensus of around $4.45. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Still, the company reaffirmed its full-year guidance and provided more clarity on its 2025–2026 outlook, prompting mixed reactions from analysts. For instance, analyst Lance Wilkes from Bernstein remains optimistic, citing UnitedHealth's strong market position and potential rebound in Medicare Advantage trends. In contrast, BofA analyst Kevin Fischbeck is more cautious, due to concerns over the company's slower growth pace. With the stock in focus, now's a good time to take a closer look at who actually owns UNH shares. Now, according to TipRanks' ownership page, public companies and individual investors own 45.60% of UNH. They are followed by mutual funds, ETFs, other institutional investors, and insiders at 28.84%, 23.20%, 2.19%, and 0.18%, respectively. Digging Deeper into UnitedHealth Group's Ownership Structure Looking closely at top shareholders, Vanguard owns the highest stake in UNH at 8.89%. Next up is Vanguard Index Funds, which holds a 7.03% stake in the company. Among the top ETF holders, the Vanguard Total Stock Market ETF (VTI) owns a 3.22% stake in UNH stock, followed by the Vanguard S&P 500 ETF (VOO), with a 2.84% stake. Moving to mutual funds, Vanguard Index Funds holds about 7.03% of UNH. Meanwhile, Fidelity Concord Street Trust owns 1.72% of the company. Is UNH a Good Buy Now? Turning to Wall Street, UNH stock has a Moderate Buy consensus rating based on 18 Buys, three Holds, and two Sells assigned in the last three months. At $321.76, the average UnitedHealth stock price target implies a 28.93% upside potential.
Yahoo
2 days ago
- Yahoo
An Unpopular Pick: 5 Reasons Why Buying UnitedHealth Group Stock Now Could Be a Brilliant Move
Key Points UnitedHealth Group continues to face multiple challenges. The company has a plan to address the issues and boost its bottom line. The stock is a bargain with solid long-term growth prospects. 10 stocks we like better than UnitedHealth Group › An old country song morbidly titled "Gloom, Despair, and Agony on Me" included the lyrics, "If it weren't for bad luck, I'd have no luck at all." This might be an apt motto for UnitedHealth Group (NYSE: UNH) these days. The healthcare giant continued to disappoint investors with its 2025 second-quarter update, revealing that full-year earnings will be worse than expected. The U.S. Department of Justice (DOJ) is conducting an investigation of UnitedHealth related to its Medicare billing practices, and its share price has plunged nearly 60% from the peak set in late 2024. UnitedHealth Group stock is a decidedly unpopular pick. However, here are five reasons why buying this beaten-down stock could be a brilliant move. 1. The company has a plan to address its problems It would be one thing if UnitedHealth Group's challenges were insurmountable, but they're not. The company has a clear and compelling plan to address its problems. UnitedHealth didn't anticipate how hard it would be hit by rising medical costs, especially with its Medicare Advantage plans. The most effective solution to this issue is simple: Raise premiums. That's exactly what UnitedHealth plans to do, but it has to wait until the beginning of next year for most premium hikes to take effect. Since commercial plans renew throughout the year, the company can implement premium changes more quickly with this line of business. Tim Noel, the new CEO of the UnitedHealthcare insurance business, said in the Q2 earnings call that his unit will have "strongly responsive pricing for 2026." That's not the only step the company is taking, though. Noel stated that UnitedHealthcare has "stepped up our audit clinical policy and payment integrity tools to protect customers and patients from unnecessary costs." He added that the business is also streamlining its provider networks, especially for Medicare Advantage plans. UnitedHealth Group's Optum segment isn't performing as well as desired, either. Again, though, the company is implementing a plan to fix the problems. Optum CEO Patrick Conway said in the Q2 call that price increases are coming to reflect high patient acuity and risk. He also mentioned that Optum Health will discontinue serving around 200,000 patients. 2. Cost-cutting should boost the bottom line UnitedHealth Group is also moving forward with cost-cutting initiatives to boost its bottom line. CEO Stephen Hemsley referred to "meaningful cost opportunities within the enterprise" in his comments during the Q2 call, adding, "[W]e are pursuing them with urgency." Noel highlighted his unit's efforts to scale artificial intelligence (AI) across health plan operations, which should generate cost savings while improving patient and provider experiences. Conway expects Optum Health to deliver nearly $1 billion in cost savings in 2026. 3. Long-term growth prospects remain strong Despite UnitedHealth's challenges over the near term, its long-term growth prospects remain strong. The company expects to return to earnings growth next year. Hemsley predicts that earnings growth will accelerate in 2027 and beyond. Is this upbeat assessment merely the result of a CEO looking through rose-colored glasses? I don't think so. The consensus among analysts surveyed by LSEG is that UnitedHealth Group will deliver solid year-over-year earnings growth in 2026. 4. An experienced, steady hand is now at the wheel It's also important for investors to remember that UnitedHealth Group once again has an experienced, steady hand at the wheel. Hemsley returned to run the company two months ago. He previously served as CEO from 2006 to 2017, a period during which UnitedHealth Group flourished and its share price soared. 5. The stock is a bargain Last, but not least, UnitedHealth Group stock is a bargain. Its shares trade at a forward price-to-earnings ratio of below 11.6. That's not much higher than the valuation during the financial crisis of 2008 and 2009. Does the DOJ investigation justify such a low earnings multiple? I don't think so. UnitedHealth survived a previous lengthy investigation, with a court-appointed Special Master ultimately concluding that there wasn't evidence that the company had done anything wrong. Independent audits from the Centers for Medicare and Medicaid Services show that UnitedHealth's Medicare practices are, in the company's words, "among the most accurate in the industry." UnitedHealth Group insists that it "has full confidence in its practices." Should you buy stock in UnitedHealth Group right now? Before you buy stock in UnitedHealth Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and UnitedHealth Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,075,791!* Now, it's worth noting Stock Advisor's total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy. An Unpopular Pick: 5 Reasons Why Buying UnitedHealth Group Stock Now Could Be a Brilliant Move was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
