UNH stock nears 5-year breakdown, bus Wall Street remains bullish for one reason

While the S&P 500 powers to new all-time highs, UnitedHealth Group (UNH) is heading in the opposite direction.

The health insurance giant closed below $283 on Friday, marking its second-lowest close in five years. The only worse finish came on May 15, when the stock hit $275.

So far in 2025, UNH has cratered 43% and is down nearly 50% over the past 12 months. The stock now trades at less than half its 52-week high.

Meanwhile, the broader marker, as benchmarked by the S&P 500 is up 7% year-to-date. Even the underperforming healthcare sector has trimmed its 2025 loss to around 4%.

As Investors Observer recently reported, the collapse in UNH shares comes amid disappointing earnings and a growing fraud scandal tied to its Medicare Advantage business.

The company is currently under investigation by the Department of Justice for allegedly inflating payments under the program. Despite the freefall, analysts haven’t turned entirely bearish.

Morgan Stanley recently slashed its price target on UNH from $374 to $324, citing management’s cautious two-year outlook. But it maintained its “Overweight” rating , which is effectively a Buy.

That bullish outlook stems largely form Morgan’s expectation that margins in Medicare Advantage will begin recovering by 2026.

Wolfe Research followed suit, cutting its target to $330 from $360 but sticking with an “Outperform” rating.

And despite the ongoing scandal, UnitedHealth still appears in Goldman Sachs’ top healthcare holdings, according to a recent portfolio breakdown by Insider Monkey.

But optimism will need backup. UnitedHealth is set to report second-quarter earnings on July 29, and expectations have already been lowered.

Analysts forecast earnings per share of $5.08, down sharply from $6.80 a year ago. Revenue is projected at roughly $111 billion, a modest sequential increase, driven by continued enrollment gains and expansion of its Optum health services unit.

The real question is whether a modest revenue bump can offset what’s shaping up to be one of the worst public drawdowns in the company’s history, both in performance and perception.