UnitedHealth Shares End 2025 as the Dow’s Worst Performer

UnitedHealth Group has concluded 2025 as the weakest component within the Dow Jones Industrial Average. The healthcare giant's stock, trading around $327, has declined by 35% since the start of the year. All eyes are now on a pivotal earnings report scheduled for January 27, 2026, with market experts forecasting a dramatic drop in per-share profit of nearly 70%.

The stock's performance represents its most challenging annual result since the 2008 financial crisis. The sheer scale of the volatility is highlighted by a 52-week range from a high of $606.36 to a low of $234.60—a staggering 61% differential that has unsettled even long-term investors.

Several concurrent issues have driven the decline:
* An unexpected surge in the Medical Care Ratio to 89.9%, well above projections.
* Unanticipated increases in Medicare Advantage costs throughout 2025.
* Leadership transition with the departure of CEO Andrew Witty and the return of Stephen Hemsley.
* Ongoing investigations by the Department of Justice into Medicare billing practices.

Institutional Investors Show Divergent Strategies

Recent regulatory filings reveal a split in sentiment among major funds. While Wellington Management slashed its stake by 31.8%, selling 7.7 million shares worth approximately $2.66 billion, Capital Research Global Investors took the opposite tack. They increased their position by 126.9%, acquiring 7.3 million shares. UBS Asset Management expanded its holding by 59.8%, whereas Appaloosa LP divested 91.7% of its shares. Despite the turbulent period, institutional ownership remains high at 87.86% of the company's equity.

Should investors sell immediately? Or is it worth buying Unitedhealth?

Wall Street Braces for a Sharp Earnings Contraction

Analysts are preparing for a difficult set of numbers for the fourth quarter of 2025. Estimates point to an adjusted earnings per share (EPS) of $2.09, a stark contrast to the $6.81 reported in the same quarter a year earlier. For the full year, the adjusted profit is projected to fall to $16.30 per share from $27.66 in the prior year, marking a 41% decrease. The company's recent track record of surpassing profit expectations in only two of the last four quarters adds a layer of uncertainty for the market.

Regulatory Scrutiny and a Path Forward

In response to an independent review, UnitedHealth has unveiled a 23-point action plan aimed at rebuilding trust and addressing patient criticisms. Regulatory pressures persist, though the corporation's massive scale offers a degree of insulation. Looking ahead to 2026, a potential tailwind exists: reimbursement rates for Medicare Advantage are set to rise by up to 5%, providing direct relief to the core business. Management has signaled expectations for "sustained and accelerated growth" beginning next year.

Analyst Ratings and Valuation Metrics

The current analyst consensus presents a mixed but cautiously optimistic outlook. Of 25 covering analysts, 15 recommend a "Strong Buy," seven advise "Hold," and one issues a "Strong Sell" rating. The average price target sits at $394.91, implying a potential upside of nearly 22% from current levels. With a forward P/E ratio around 18, a robust free cash flow exceeding $17 billion, and a dividend yield of 2.7%, the valuation may begin to attract investors with a longer-term horizon.