Markets
United Healthcare CEO Brian Thompson Fatally Shot In Midtown Manhattan
(Stephen Maturen/Getty Images)

UnitedHealth extends slump as 2026 guidance underwhelms

The company is the first of its health insurance peers to report earnings this year.

J. Edward Moreno

Already under pressure from the Trump administration’s proposal to keep Medicare rates flat for next year, UnitedHealth plunged further on Tuesday after issuing an underwhelming forecast.

UnitedHealth’s earnings results for the last quarter of 2025 were in line with Wall Street’s expectations. But the company’s outlook appears to be giving investors, who were reeling after reports of the proposal, even more pause. The stock was down 19% in midday trading.

For the last three months of 2025, UnitedHealth reported:

  • $2.11 adjusted earnings per share, compared to the $2.10 analysts polled by FactSet were expecting.

  • $113.2 billion in revenue, compared to the $113.7 billion the Street was penciling in.

  • A medical cost ratio of 92.4%, a bit higher than the 92.1% forecast by analysts.

UnitedHealth said it expects to report 2026 revenue greater than $439 billion. Revenue at that mark would be a 2% decline year over year, and significantly less than the $454.2 billion analysts had expected. It also expects to bring in annual adjusted earnings per share over $17.75, compared to the $17.74 analysts are currently penciling in.

The expected revenue drop is a result of “right-sizing” at the company: it expects its membership rates to decline (including by about 1.4 million for Medicare Advantage plans) and will shrink its care delivery unit, Optum Health.

The company is the first of the big health insurers to report earnings this year. On Monday, reports surfaced that the Trump administration would seek roughly no change in rates for Medicare insurers, sending UnitedHealth and its peers lower. The government, which pays insurers more for sicker patients, also plans to crack down on inaccurate overbilling by changing how its “risk score” is calculated.

Tim Noel, CEO of UnitedHealthcare, the conglomerate’s insurance arm, suggested that the company would lobby the federal government “to ensure an appropriate final growth rate calculation to avoid a profoundly negative impact on seniors’ benefits and access to care.”

He said the company is focused on improving Medicare Advantage margins in 2026. “The advance notice published yesterday simply doesn’t reflect the reality of medical utilization and cost trends,” Noel told analysts Tuesday morning. 

The past year has been a tumultuous one for the broader health insurance industry, which has been roiled by higher healthcare costs. UnitedHealthcare saw its medical cost ratio rise to 89.1% in 2025 from 85.5% in 2024, representing billions of dollars in added costs.

At the same time, the enhanced tax credits for Affordable Care Act plans expired at the end of last year, pushing millions of people on government-subsidized plans to forgo coverage.

Experts expect healthcare premiums to skyrocket this year. Ending the subsidies inflates premiums in part because healthier people are most likely to drop from expensive plans, leaving a smaller pool of sicker people. 

UnitedHealth CEO Stephen Hemsley said the company plans to give profits from its ACA plans back to customers in 2026. The company is less exposed to ACA plans than other competitors, such as Oscar Health, Molina Healthcare, and Centene Corporation, which were not represented at the hearing.

Beyond sector-wide headwinds, UnitedHealth is also facing civil and criminal investigations by the Department of Justice, including over its Medicare billing practices.

More Markets

See all Markets
markets

United beats Q1 earnings and revenue estimates, lowers full-year profit guidance amid surging jet fuel prices

United Airlines reported its first-quarter earnings results after the bell on Tuesday. The carrier’s shares ticked down in after-hours trading.

For Q1, United reported:

  • Adjusted earnings of $1.19 per share, compared to the Wall Street estimate of $1.08 per share compiled by FactSet.

  • $14.6 billion in revenue, compared to the $14.39 billion consensus estimate.

In the first quarter, United’s fuel expense grew 12.6% from the same period last year to $3.04 billion.

For the second quarter, United expects adjusted earnings per share of between $1 and $2, shy of Wall Street expectations of $2.08. For the full year ahead, United said it expects earnings between $7 and $11 per share, compared to its prior guidance of between $12 and $14 per share.

“Guidance assumes United’s revenue recovers 40% to 50% of the fuel price increases in the second quarter, 70% to 80% of the fuel price increases in the third quarter and 85% to 100% of the fuel price increases in the fourth quarter 2026,” read the company’s investor update.

Earlier this month, United was among the first major US airlines to hike its bag fees amid higher fuel costs. Its shares have fallen more than 15% from a February high days before the war in Iran began.

United has also made waves this month following reports that CEO Scott Kirby had floated the idea of a merger with American Airlines to President Trump. A merger between two of the big four airlines would create a true US behemoth, controlling more than a third of the American market. American Air last week said it wasn’t interested in merging with United and hadn’t held talks on the idea. On Tuesday, Trump told CNBC that he doesn’t like the idea either.

markets

Hedge funds are following retail traders into the Magnificent 7

Hedge funds are following retail traders into the stocks the masses never stopped buying.

“As we kick off earnings for megacap tech stocks, this stood out: [hedge funds] have started buying Mag7 stocks again this month though positioning remains well below the peak levels seen in early 2016,” wrote Goldman Sachs’ Cullen Morgan.

Goldman PB Mag 7
Source: Goldman Sachs

In early April, JPMorgan strategist Arun Jain noted that retail investors had basically been selling everything but the Magnificent 7 stocks as part of a more cautious stance due to the Iran war.

(Apple has been a long-standing exception to this trend, presumably because retail traders arent fond of its hands-off approach to AI.)

JPM Retail flows

Last August, Jain discussed how retail activity tended to “crowd in” institutional buyers in meme stocks, while Goldman’s John Marshall advised clients to piggyback on stocks beloved by retail traders. Speculative, retail-geared assets proceeded to go on a tremendous run that soured in October.

But there are some early indications that a similar bout of speculative fervor is bubbling up once more.

markets

POET Technologies surges above $10 for first time in 4 years amid explosion in call volumes

POET Technologies is up nearly 40% this week as options market activity goes haywire in a faint echo of what got the stock on retail traders’ radars in October.

As of 11:12 a.m. ET, more than 10 calls have changed hands for every put traded. This bullish impulse has propelled the stock above the $10 threshold for the first time since March 2022.

Shares of the optical communications firm briefly dipped last week after Wolfpack Research said it was short the company because its investors would be exposed to an “IRS tax nightmare.”

The company responded that day saying it was taking measures for US shareholders that “should mitigate certain potential adverse US federal income tax consequences to it that could otherwise result from the Company’s status as a passive foreign investment company.”

Latest Stories

Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, Robinhood Derivatives, LLC, or Robinhood Money, LLC. Futures and event contracts are offered through Robinhood Derivatives, LLC.