By Denny Jacob
UnitedHealth Group earlier Tuesday suspended its earnings guidance for 2025, prompting investors to pull back on shares of the company and other names in the healthcare space.
Other health insurers in the S&P 500, including Humana, Molina Healthcare and Cigna, saw their stock prices decline. Companies in the broader healthcare space, including Elevance Health, Centene and CVS Health, also retreated.
UnitedHealth's suspended guidance follows up on reduced forecasts first issued in April. In suspending its guidance Tuesday, the Eden Prairie, Minn., insurer noted that care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter, while the medical costs of new enrollees in the company's Medicare plans remained higher than expected.
UnitedHealth on Tuesday also announced it appointed Stephen Hemsley as its next chief executive officer effective immediately, following Andrew Witty's decision to step down. Analysts at Mizuho in a research note said they expected that Witty would step down as CEO, but that "the suspension of guidance is surprising."
Investors' reaction indicates that few expected the suspended guidance.
UnitedHealth tumbled 16% to $317.80, while Humana declined 6.6% to $236.10. Molina Healthcare retreated about 3.9% to $314.79, while Cigna fell 3.6% to $304.41.
Elevance Health, Centene and CVS Health all declined by at least 4.8%.
The S&P 500 Health Care sector index is on pace for a new 52-week closing low Tuesday, putting it on pace for the lowest close since Dec. 8, 2023.
Write to Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
May 13, 2025 13:03 ET (17:03 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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