Shares in US medical care provider UnitedHealth (UNH) plummeted 19% to $284 after the firm forecast lower sales in FY26. The healthcare giant hasn’t experienced a drop in sales since 1989, hence the shakeout on Wall Street.

Share price: $284 (-19%)	PE: 14.9x
Market cap: $258bn	Yield: 2.5%

FIRST FALL IN 35 YEARS

UnitedHealth forecast FY26 revenue would be at least $439 billion, which would represent a 2% decline on FY25. It would also be well below the analyst consensus of $455 billion for this year. Sales for FY25 were up 12% to $447.6 billion, while the firm served nearly 50 million patients during the year.

Although its sales outlook disappointed, UnitedHealth forecast EPS in line with analysts’ forecasts at $17.75 against $16.35 last year. Last year’s earnings missed estimates as the firm dealt with a major cyberattack.

In a statement, UnitedHealth’s chief finance officer said the firm’s FY26 guidance reflected ‘greater operating discipline and precise execution’. The company has been trying to ‘right-size’ the business in the face of flat or falling payment rates.

The firm said it had laid the foundation in H2 last year for more disciplined and transparent operations, stronger performance and sustained growth. Key elements in the company’s progress in H2 2025 included:

• Re-focusing on key markets, products and geographies.
• Aligning pricing discipline to account for higher medical trends and the impact of
  health care policy changes.
• Re-baselining operations at Optum, including new leaders who have refocused
  and strengthened the commitment to integrated value-based care.
  

On Monday, the US Medicare Agency said payment rates for government-backed Medicare Advantage health plans would be flat in 2027. Wall Street analysts had predicted an increase or around 6% in payment rates.

Tim Noel, CEO of the company’s UnitedHealthcare insurance unit, called the rate proposal disappointing, according to Reuters. ‘We will need very meaningful benefit reductions and to take a hard look at our geographic and product footprint, likely similar to what played out for 2026,’ added Noel.

Read the press release here: https://www.unitedhealthgroup.com/investors/financial-reports.html

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