UnitedHealth UNH Q2 earnings preview
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Unitedhealth Group President and CEO Stephen Hemsley will face the first actual test of the US ability to recover the trust of investor as the US is the largest private insurance company.
The Dow component saw that the price price has fallen almost half since mid -May after the gains in the flagship Medicare program and Optum health doctor applications. This led to the sudden resignation of former CEO Andrew Witty, and forced the company to change the former CEO Hemsley and suspend the guidance of earnings. Furthermore, the company faces investigations of the Ministry of Penalties and Civil Justice in Medicare billing practices.
Mizuho Securities Analyst Ann Hynes sits in a “excellent storm” because United is facing difficulties on multiple fronts. Now, investors want to know how Hemsley plans to direct the company out of the hurricane after having provided “we are determined to regain your confidence and confidence” last June.
Here are three important things that investors will seek from the company’s earnings report.
Big Issue: 2025 Guidance
More than the second quarter figures, analysts focus on the appearance of Unitedhealth all year round. Hemsley told investors that the company would provide an update about 2025 earning guidance after suspending its prediction in May.
Analysts expect Unitedhealth to get full -year earnings of $ 21,26 per share, according to consensus estimates from LSEG. Estimates vary from $ 18 to $ 26.44 per share.
Hynes said, “Anything below $ 18 – it will be seen as negative by this street.” He said.
RBC Capital Markets Analyst Ben Hendrix put his prediction on $ 23.36, but Wall Street was in a decline in Unitedhealth.
“Based on our claim that the management is 3% of the target MA margin for 2026, the medical Advantage is more optimistic, but the customers we express about acceleration (medical cost) tendency to accelerate (medical cost) advantage.”
Medicare Advantage and Optum Health Outlook
Analysts also focus on how the company plans to balance Optum Health, the Doctor Application Unit. For years, Unitedhealth’s 90,000 employees or their affiliated doctors have dismissed them in their plans to treat them better than their peers in the flagship Medicare Advantage.
Baird Analyst Michael Ha said, “Periodic investors were really united for United’s power… Optum Health has produced an important margin that United’s power to guide its own medicare advantage members.” He said.
However, in the first quarter of this year, Optum Health saw a sharp decline in the snow. Analysts, partially known as the V28 Mededen Period reimbursement standards of a period of period, which caused a period of period, which makes it difficult for insurance companies and doctors to bill for extra services, he said.
Mizuho’dan Hynes, previous billing coding rules, higher risk score and reimbursement rate of general heart conditions, such as chronic conditions, such as adding invoicing codes for adding more spaces, he said. Under the new V28 rule, billing codes are more specific, closing gaps that can increase repayment.
“V28 is too black and white, so you don’t have this kind of ability to add code, and many codes have been removed.”
However, HA said that the V28 changes started in 2024 at a time when the elderly began to use more care. Many of Unitedhealth’s Medicare Advantage competitors made adjustments last year to address the change. In the first quarter, the sudden collapse of the optum health margins caught Unitedhealth unprepared.
Ha, “I think this is an example of a Misxecution. Before then they knew that the head wind was moving to the year and even well, but for some reason he couldn’t find offset.” He said. “We are still sure that Optum Health and United can save the unit economy and rebuild the unit economy, but it may potentially deteriorate for the next to two years.”
Legal and regulatory issues
The company prevented the earning report on Thursday and a SEC FILMING Medicare Program invoices are facing criminal and civilian investigations by the Ministry of Justice.
Unitedhealth said the company first cooperated with investigations reported by Wall Street Journal. In March, a special master appointed by the court in March, during the first Trump administration brought by Doj in a case containing similar allegations in favor of the company said in favor of the company.
Hynes believes that the investor’s concerns about the doj probes are exaggerated.
“Stocks are traded as to throw them from Medicare and Medicaid, and the possibility of this is in my opinion,” he said. “They will probably result in writing a check and making a corporate integrity agreement … This is what happened in the past.”
However, the fiery death of the Unitedhealth, which prosecutors claimed to have been carried out by an armed man mobilized by insurance denials, revealed a ground of public criticisms of health insurers’ practices.
After a career in Cigna, the former information criticizing industrial applications, the former information, said the pressure on large insurance companies such as Unitedhealth would probably not end. As Washington, Medicare, Medicaid and other Government with high health and drug costs in health programs, the regulatory study in the Congress increased on both sides of the corridor.
“Many of the congress members are doctors or republican, some pharmacists, and they see the heavy hand of these companies from the first hand,” Potter, President of the Center for Health and Democracy. He said. “And so you see the attention by the Republicans, and I haven’t seen it before.”
In June, Unitedhealth announced that he hired third -party auditors to review the applications of the company’s health insurance and pharmacy aid services in order to “provide transparency and confidence to our stakeholders” in the company’s business applications.
The Company said that he would not have a lot of details to offer about this audit during the second quarter of the CNBC call. He does not expect the investigation to be completed by the end of the third quarter of this year.
