• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Investing

Why this brokerage downgraded UnitedHealth’s rating to ‘hold’

by May 19, 2025
written by May 19, 2025

Brokerage firm TD Cowen downgraded the recently under-fire UnitedHealth to a “hold” rating.

The research firm also slashed the price target to $308 from $520.

Why did the analysts downgrade UnitedHealth’s stock

TD Cowen’s analyst, Ryan Langston, said the new V28 Medicare advantage model affects the company more than its competitors. 

UnitedHealth’s higher risk adjustment factor (RAF) compared to its peers is a concern for the brokerage.

RAF is a way to calculate a patient’s healthcare costs compared to the average. 

This is used to find out how much payment an insurer would get from the Centres for Medicare & Medicaid Services (CMS). 

So, a patient having a higher RAF would mean there would be a higher payment to Medicare Advantage. 

Normally, the government pays the insurers more for covering patients with more complex illnesses.

Medicare Advantage is UnitedHealth’s biggest business, where it makes more than $100 billion a year. 

Since UnitedHealth had higher RAF scores, they used to get higher payments from CMS. 

With the V28 advantage model, the RAF score would be lowered, and hence, the payments UnitedHealth would get will be lower. 

Since the V28 model will be fully implemented by 2025, the analyst sees risk for the company in 2026 as well. 

The analyst also said the increasing medicare advantage cost trend, along with recent regulatory investigations, adds pressure to the company. 

Recent woes of UnitedHealth

Last week, a WSJ report said that the Justice Department’s criminal healthcare fraud unit is investigating the company’s Medicare Advantage business practices. 

Previously, it was also reported that the Justice Department is investigating the company’s Medicare billing practices.

Before that, the company’s CEO, Andrew Witty, resigned suddenly. The company also suspended its 2025 earnings guidance due to increasing medical costs. 

In its first quarter earnings, the company missed the street’s expectations. It also reduced the full year’s earnings forecast. 

It had predicted adjusted earnings of $26 to $26.50 per share this year. This was down from December’s prediction of $29.50 to $30.00. 

Its medicare ratio increased to 84.8%, a slight increase from 84.3% in the previous year. 

The Medicare ratio is the amount the company spends compared to what it earns. The total medical costs also increased to $7.3 billion from $6.6 billion in the previous year. 

This was all after Brian Thompson, the company’s insurance division CEO, was murdered in December 2024. 

All these events had a massive effect on the stock price as the company’s shares have slid 42% in the year so far. 

Insiders are buying the UNH stock

The company’s stock had surged over 6% on Friday, giving it a temporary relief after company insiders bought some of the stock. 

UnitedHealth’s director, Kristen Gi, bought 3,700 shares of the company at $271.17 per share.

Timothy Flynn, another company director, bought 1,533 shares at an average price of $320.80. 

Investors seemed to buy into the relief rally as the stock was up 3.61% to $302.44 on Monday

The post Why this brokerage downgraded UnitedHealth’s rating to ‘hold’ appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Nvidia opens NVLink Fusion ecosystem, expands Taiwan footprint with Foxconn
next post
US stocks slip in the red on Monday: Dow down 100 points, S&P drops 0.5%

related articles

Asian markets open: Nikkei, Hang Seng fall on...

June 12, 2025

Aluminum and steel tariffs spark rise in secondary...

June 12, 2025

Airbus sees aviation boom ahead, global fleet to...

June 12, 2025

US-China trade talks and Washington’s decade-long effort to...

June 12, 2025

Europe markets open: Stoxx 600 dips as UK...

June 12, 2025

UK GDP falls by 0.3% in April as...

June 12, 2025

Gordon Brothers buys Poundland; pledges £80 mn for...

June 12, 2025

Air India plane crash: London-bound flight with 242...

June 12, 2025

Air India plane crash live update: Indian President...

June 12, 2025

Copper remains supported for now even as China...

June 12, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Here’s what the NBA’s new media deal means for hoops fans

    July 26, 2024
  • Elon Musk’s X Corp. files notice in Alex Jones’ Infowars bankruptcy case

    November 18, 2024
  • Disney rolls out line-skipping park passes costing up to $449

    October 17, 2024
  • GOPers press for the release of JFK, Epstein files: Here’s why they’re not released yet

    February 26, 2025
  • Mike Pence aims to be ‘constructive force’ during Trump’s second term while willing to challenge him

    February 18, 2025

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 3

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 4

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (6,247)
  • Investing (634)
  • Stock (935)

Latest Posts

  • First on Fox: Top outside group backing House Republicans sets fundraising record

    October 8, 2024
  • Boeing to cut 17,000 jobs as losses deepen during factory strike

    October 14, 2024
  • Bed Bath & Beyond relaunches with first store in Nashville, plans dozens more

    August 9, 2025

Recent Posts

  • USDCAD and USDCNH: USDCNH is in a positive trend

    August 27, 2024
  • Trump follows through: US hits Iran’s nuclear sites ahead of national address

    June 22, 2025
  • Nasdaq 100 Future: Market Trends & Nvidia’s Impact

    August 29, 2024

Editor’s Pick

  • Duffy blasts Biden, Buttigieg for ignoring report about failing air traffic control system: ‘DID NOTHING!’

    May 6, 2025
  • Zuckerberg, expressing regrets, admits bowing to Biden administration pressure to remove content

    August 28, 2024
  • Kash Patel hammers ‘grotesque mischaracterizations’ from Dems amid fiery FBI confirmation hearing

    January 30, 2025
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock