Ferrari shares slump 12% in biggest drop since 2016 listing
Citi analysts said that although Ferrari continued to deliver solid results, the focus had now shifted to whether the Milan- and New York-listed group can sustain its high profitability amid slowing growth in sales volumes and pricing.
"The focus now shifts to how far the EBIT margin can go in H2, with shipments and (Average Selling Prices) slowing," wrote Harald Hendrikse at Citi.
Ferrari said it will reduce the price compensation it introduced in April on some cars sold in the United States once tariffs on EU-made products effectively move to 15% from 27.5%.
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UnitedHealth just reported billions in quarterly profit. Earnings were strong. The company sounded stable. And yet, Wall Street is dumping the stock. Shares are trading near multi-year lows, underperforming peers, and reacting poorly to each quarterly release. The market doesn't move like this for nothing—so what's really going on? Markets often sniff out risks long before they're made official. The headlines are piling up: government investigations, operational failures, and leadership questions, but the price has already started to discount something deeper. Investors are trained to react to numbers. But when structure breaks, the numbers are often the last to go. This isn't about a soft quarter. The model itself is cracking, and the market sees it. The way UnitedHealth generates earnings, the incentives behind its vertical integration, and the regulatory heat all point to fragility that isn't captured in consensus spreadsheets. The market is whispering what many investors don't want to admit: that something is changing here. And once trust fades, the re-rating isn't temporary. It's structural. UnitedHealth Stock: Big, Profitable, Misunderstood UnitedHealth trades with a market value of about $226 billion, against $400 billion in revenue for 2024, with 2025 revenue expected to reach mid‑$445 billion to $448 billion. Size doesn't really equal a safe company; it often hides the fragility beneath. Most investors can't describe how the business works. They see adjusted EPS. They don't question the mechanics. They assume that anything producing this much cash must be built to last. But what looks durable can rot from the inside. The core of UnitedHealth's engine is vertical integration. Optum decides on care, delivers it, and pays itself. One hand washes the other, all under the same roof. It's efficient when unexamined. But regulators are finally paying attention. When the payer, provider, and data all sit in one unit, it becomes harder to separate health outcomes from billing outcomes. Investors often mistake size for insulation. But complexity cuts both ways. When that model starts to wobble, through government probes, whistleblower claims, or unexplained earnings distortions, it doesn't usually collapse overnight. It slowly leaks. This is what we are witnessing. The price action is the tell. This isn't about sentiment anymore. It's about what the market now knows; the market no longer trusts what it thought it understood. You can see it is undone. Slowly at this point. But it's picking up. UnitedHealth Is In The Crosshairs Of The Regulators The Department of Justice now runs both criminal and civil investigations into UnitedHealth's Medicare Advantage billing, officially confirmed on July 24, 2025. Washington is targeting diagnostic coding and risk adjustment practices tied to higher payouts. A process investigators say may have involved pressure, bonuses, and algorithmic recommendations to staff for certain lucrative diagnoses. At the center is Optum, UnitedHealth's massive care delivery and analytics arm, which assigns diagnoses, delivers services, and influences payer reimbursement. That vertical structure underpinned margin expansion until it became a regulatory vulnerability. Congress and CMS are now eyeing those same incentives for bundled services that may prioritize profit over care. And according to multiple reports, lawmakers are drafting reforms to Medicare Advantage to clamp down on what they see as systemic abuse. This is more than a compliance issue. If enforcement leads to fines or limits on Optum's ability to steer claims, UnitedHealth loses both margin and narrative. The company disclosed a potential settlement cost of $1.6 billion tied specifically to these investigations. For investors, this isn't a question of past performance but future structure. If Washington forces a redesign in how payer, provider, and auditor relationships operate within Optum, valuation multiples change. You won't see regulatory risk on a spreadsheet. It's not in the line items. But it's in every fund manager's head. And the market is already pricing that doubt. Earnings Vs. Trust UnitedHealth keeps beating the numbers. But the market's not cheering anymore, and that should make investors stop to think. Second‑quarter 2025 adjusted EPS came in at $4.08, while GAAP net earnings per share were about $3.74, reflecting a 9‑10% spread. This isn't a one-off. The company has leaned on adjustments for several quarters, removing charges from cyberattacks, restructuring, litigation, and 'normalizing' expense items. Each quarter it gets harder to square the adjusted reality with the actual income statement. Investors have tolerated this because the stock used to respond. Now, even beats fall flat. The post-earnings reaction in July was strong, with headline numbers, and yet shares sank over 4%. It's not the earnings they're questioning. It's the whole premise. When the market no longer trusts the adjustment logic, the premium unwinds. At some point, 'adjusted' starts sounding like wishful thinking. That's a dangerous pivot for a stock that trades on perceived consistency. The issue here is credibility. And when credibility gets questioned in a complex, vertically integrated healthcare giant with active DOJ probes and massive opacity in its internal operations, the path forward narrows quickly. UnitedHealth's numbers still impress. But the market is no longer listening to the numbers alone. It's watching what they're trying to cover. Optum: The Black Box That Powered Growth At UnitedHealth For years, Optum was UnitedHealth's crown jewel. It gave the company vertical integration that most healthcare giants could only dream of. Run the insurer. Own the doctor's office. Control the pharmacy benefit manager. Route the claims. Capture every step of the dollar. Investors praised it as genius. Until now. Optum was built for margin expansion. By combining payer and provider, UnitedHealth collapsed the value chain into itself. But that same structure is now drawing fire. Regulators are asking whether a company can truly manage care outcomes and approve and profit from the services being recommended. This questions their entire integration strategy. What used to be pitched as 'scale and efficiency' now looks like opacity. Good luck getting through an Optum report without needing aspirin halfway. It's all intentional. In a market that once rewarded complexity, investors are shifting toward simplicity and transparency. Optum is the opposite. Here's the rub: the more essential Optum is to UnitedHealth's story, the more exposed the company becomes to scrutiny. Break the chain or just shake investor faith in it and the premium vanishes. Optum was once the crown jewel. Now it's the bullseye. The Cyberattack Was A Wake-Up Call At UnitedHealth When Change Healthcare, an Optum subsidiary, was hit by a massive ransomware attack earlier this year, most investors treated it as a one-off disruption. It wasn't. It was a systemic failure that revealed how fragile UnitedHealth's infrastructure had become and how slow its leadership was to respond. The breach paralyzed billing and claims systems for weeks across the U.S. healthcare network. Providers couldn't get paid. Pharmacies stalled. Patients were caught in the middle. For a company that sells itself on reliability and integration, the collapse of a core system fully exposed them to operational risk. But the real damage was reputational. CEO Andrew Witty's delayed response and lack of transparency during the fallout shook investor confidence. For a business model that depends on centralized control, a failure of this scale felt like the opposite of control. The market didn't punish the stock immediately, but the tone shifted. Since the hack, UnitedHealth stock has lagged peers, failed to respond to buybacks, and sold off post-earnings despite beats, indicating trust erosion. In healthcare, operational execution is the product. And the cyberattack told the market what the earnings couldn't: UnitedHealth may be bigger than ever, but its foundation isn't as solid as the numbers suggest. Defensive Stocks Are No Longer Safe Havens Investors once treated UnitedHealth like a bond proxy. It was dependable, defensive, and cash-rich, perfect in a zero-rate world, but the world has moved on. And the assumptions that supported its premium are unraveling with it. But investors have moved on. Higher rates change everything. Safety no longer commands a valuation premium. If anything, it draws sharper scrutiny. Now, capital seeks efficiency and flexibility. It rotates out of perceived stability the moment cracks appear. That's exactly what's happening with UnitedHealth. It's mainly about multiples. Stocks like UnitedHealth were priced on the assumption that growth would stay steady, margins wouldn't come under pressure, and regulators would remain passive. That's no longer the case. Every part of the thesis, from Medicare Advantage economics to Optum's integration, is under review. And the old multiple doesn't hold under new conditions. At 9 to 10 times forward earnings, UnitedHealth stock is still priced for control. But what happens if growth slows, scrutiny increases, and earnings quality erodes? That multiple doesn't hold when earnings wobble and faith erodes. And that's what we're starting to see. The idea that defensive means safe no longer applies. In a world where capital costs more and scrutiny cuts deeper, structural risk matters more than past predictability. And UnitedHealth is showing investors what happens when they confuse size for safety. Market Behavior Is Telling The market is speaking louder than the press release. UnitedHealth's earnings keep beating expectations, yet the stock keeps bleeding. After the Q2 2025 print, shares opened higher and then reversed, again indicating doubt from the market. Buybacks, once the reliable support mechanism, are falling flat. As of the April 2025 10‑Q, the board authorized repurchasing 27 million shares, not a dollar amount. Share count & price suggest a rough upper bound of ~$13 billion (assuming ~$500/share), but no official dollar figure exists. The tape hasn't cared. Investors aren't paying for stability anymore. They're questioning the model, and the price is reflecting it. This keeps happening. Strong numbers, weak tape. That's no coincidence. The market is reacting to what those earnings might not be showing. When price action diverges consistently from headline strength, something underneath is shifting. You don't need management to confirm what the price already knows. Scenarios Investors Must Weigh Every investor in UnitedHealth needs to face a simple question: what exactly is being priced in? The stock is still valued like nothing structurally will change. That's the best-case scenario: a regulatory slap on the wrist, no breakup, and margins protected. But cracks like these don't usually stop there. The base case is more uncomfortable. It assumes the DOJ and CMS probes gain traction, triggering forced disclosures, tighter reporting standards, and some form of operational reform. That alone could compress margins across Optum, weaken pricing power, and delay capital returns. It would also likely lower the multiple as the market stops assuming permanence in a business model that's now up for review. The worst case? A permanent re-rating. If the government cracks down on how care is authorized and reimbursed, if whistleblower cases uncover deeper abuses, or if investors lose trust in Optum's structure entirely, then UnitedHealth becomes less of a cash machine and more of a litigation risk. That would mean sustained outflows, ESG scrutiny, and index pressure. Right now, the stock trades like the best-case scenario is a given. That's a mistake. Risk is what you don't see coming, and the market has a habit of mispricing structural changes until they happen. UnitedHealth Stock Is Breaking For A Reason UnitedHealth has long benefited from scale, opacity, and the assumption that healthcare complexity equals safety. That illusion is fading. The stock is breaking not because of a single quarter or a bad headline, but because the structure that powered its dominance is now under the microscope. When investors start asking the right questions, eventually price always does. That's what's happening here. The DOJ, CMS, and media aren't just circling; they're probing a business model that was built on internal leverage and integration. When that's challenged, the numbers don't matter as much as the narrative. And UnitedHealth is losing control of its narrative. This isn't a bad value call. It's something deeper—the kind of unraveling that rewrites the whole thesis. Markets don't punish giants like this without reason. When scrutiny hits complexity, it always takes time, but it always resets expectations. UnitedHealth isn't priced for scrutiny. And when the foundation cracks, the market doesn't wait for permission to react; it already has.
