Summary:
⚈ CEO Andrew Witty resigned as UNH pulled its 2025 growth forecast
⚈ Trump’s drug price plan added pressure to the struggling healthcare sector
The already turbulent situation for UnitedHealth (NYSE: UNH) has only worsened with a deluge of adverse developments. The latest turmoil on Tuesday, May 13 ensured that UNH stock collapsed 10.17% in pre-market from its latest closing price of $378.75 to $340.25 at the time of publication.
Notably, the extended session collapse sent UnitedHealth shares to their lowest levels since hitting the $320 to $350 range in early 2021.
The ongoing UNH downturn started when the latest earnings report, published in mid-April, ended the slow recovery in the aftermath of the fatal shooting of Brian Thompson last year and grew worse on the morning of May 13 with the abrupt resignation of CEO Andrew Witty.
Witty’s departure, justified by ‘personal reasons,’ was accompanied by another alarming development: UnitedHealth scheduled an emergency call to explain why it is pulling its 2025 forecast. It did, in the release, admit it does not expect a return to growth before 2026:
The company suspended its 2025 outlook as care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter, and the medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than expected. The company expects to return to growth in 2026.
After Witty’s surprise departure, former CEO and long-time company leader Stephen Hemsley will serve as UnitedHealth’s CEO.
U.S. healthcare sector faces mounting pressure in May 2025
Along with internal woes, UnitedHealth also faces an overall dire state in the broader healthcare sector. President Donald Trump ensured that pharmaceutical companies would not participate in the Monday, May 12, rally by revealing his intent to fix drug prices substantially below their prevailing levels in the U.S.
In a social media post, the commander-in-chief promised 59% lower medication costs and price reductions for many other everyday goods. While UnitedHealth is not directly impacted by the decision to the extent that drug manufacturers are, the importance of sentiment in the 2025 can’t have helped the beleaguered equity.
Featured image via Shutterstock
