UnitedHealth Group Inc. (NYSE: UNH) shares tumbled another 4% in premarket trading following the company’s disclosure of a Department of Justice investigation into its Medicare program practices, adding to what has already been a disastrous year for the healthcare giant.
UnitedHealth Group has become one of the most oversold stocks in the S&P 500 in 2025. The downturn primarily began with weak quarterly results and revised guidance in April 2025, and was further exacerbated by the CEO stepping down and the suspension of guidance in May.
The stock is currently trading at $281.49 in pre-market hours, representing a roughly 44% decline year-to-date. While shares have recovered somewhat from their May low of $274.35, the latest DOJ news threatens to derail any recovery momentum.
DOJ investigation weighs on sentiment
UnitedHealth disclosed in a statement on Thursday that it has begun complying with formal criminal and civil requests from the Department of Justice regarding “certain aspects of the Company’s participation in the Medicare program.”
The company said it “proactively reached out to the Department of Justice after reviewing media reports about investigations.”
The healthcare conglomerate emphasized confidence in its practices, stating: “The Company has full confidence in its practices and is committed to working cooperatively with the Department throughout this process.” UnitedHealth highlighted that “Independent CMS audits confirm that the Company’s practices are among the most accurate in the industry.”
To address concerns, the company has “proactively launched its own initiative to conduct third-party reviews of policies, practices, and associated processes and performance metrics for risk assessment coding, managed care practices, and pharmacy services.” However, UnitedHealth acknowledged uncertainty, warning that “We cannot predict the outcome of the government investigations.”
Wall Street forecasts
Wall Street analysts maintain a generally positive outlook on UnitedHealth’s long-term prospects. Based on 24 analyst ratings, the stock carries a “Moderate Buy” consensus with an average 12-month price target of $356.36.
The consensus view suggests the stock could reach a high of $440.00, with a low forecast of $270.00.
With the company’s Q2 earnings report expected on July 29, 2025 (before market open) investors are hoping for crucial insights into how these various challenges are affecting the business fundamentally.
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