Shares of UnitedHealth Group (NYSE: UNH) are falling today, down 4.5% as of 2:41 p.m. ET. The drop comes as the S&P 500 (SNPINDEX: ^GSPC) gained 0.3% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 0.8%.
The troubled health insurance giant is seeing its stock slide after a fellow insurer announced it was pulling its full-year guidance.
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Centene pulls guidance
Centene, a rival insurer, announced late Tuesday that it is pulling its previously set earnings and revenue guidance for 2025. The company said that new data from its Affordable Care Act plans was so poor that it would need to readjust.
Centene said that preliminary data indicated it will need to cut its previous 2025 earnings per share (EPS) target of $7.25 by $2.75 per share. Mizuho analyst Ann Hynes told investors this morning she believes it could be cut by as much as half.
The massive downward adjustment is the latest in a string of bad news for the insurance industry, leading to stocks slipping across the board.
Image source: Getty Images.
A year of troubles
The company is under investigation by the DOJ for fraudulent billing practices in its Medicare division, and a recent investigative report by The Guardian revealed that UnitedHealth has been making secret bonus payments to nursing homes in order to keep ailing residents out of hospitals and save money. The report also claims the company staffed nursing homes with its own medical teams who, at times, interfered in order to keep residents who needed hospital care from receiving it.
There are just too many issues facing UnitedHealth at the moment, with no clear picture of an imminent turnaround. This once-seemingly stable investment looks far from it at the moment, and I would stay away from the stock.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
