US30 drops 1.3% pressured by 20% crash of United Health Group shares in pre-market 📉

Futures on the Dow Jones Industrial Average (US30) are down nearly 1.3% after one of the index’s largest constituents and the biggest health insurer in the U.S., UnitedHealth Group (UNH.US), saw its shares tumble almost 20% in pre-market trading.

• The company lowered its full-year guidance, citing rising costs, and reported revenue and earnings per share below expectations. The addition of 780,000 new customers since the beginning of the year did not translate into stronger profits. Results were also negatively impacted by changes in the member mix within Optum Health, resulting in lower reimbursement levels.
• Both UnitedHealth and the broader U.S. healthcare sector have been battling elevated cost pressures since mid-2023. In the first quarter, UNH results were further burdened by a sharp increase in Medicare demand among the senior population. As UnitedHealth shares drop ahead of the open, other healthcare stocks such as Cigna, Elevance Health, Humana, and CVS Health are also trading lower.

Disappointing guidance overshadows earnings

In Q1 2025, UnitedHealth reported revenue of $109.6 billion, up $9.8 billion year-over-year and $9.1 billion quarter-over-quarter. Operating profit came in at $9.1 billion, representing strong growth of nearly 13% both year-over-year and sequentially. Net margin stood at 5.7%, compared to 5.5% in Q4 2024. The medical care ratio rose to 84.8%, up from 84.3% a year earlier. Management reaffirmed its intention to implement corrective actions and maintain its long-term EPS growth target of 13–16% annually.

It wasn’t the quarterly results, but the significantly lowered outlook that triggered one of the sharpest share price drops in UNH history. The company now expects adjusted EPS for 2025 to fall between $26.00 and $26.50, down from the previously guided $29.50 to $30.00. Analysts surveyed by LSEG had expected over $29.70 per share this year.

Optum Health still plans to expand its value-based care model to include 650,000 new patients in 2025.

Additional financial highlights

• Operating cash flow: $5.5 billion

• Total capital returned to shareholders via dividends and buybacks: nearly $5 billion

• Return on equity (ROE): 26.8%

UNH.US Shares (D1 timeframe)

In pre-market trading, UNH shares are priced around $470, suggesting a potential test of the 38.2% Fibonacci retracement level from the 2020 bull run, and a nearly 10% drop below the 200-day EMA (red line).

Source: xStation5