UnitedHealth Group Incorporated (UNH), headquartered in Minnetonka, Minnesota, owns and manages organized health systems. With a market cap of $345.3 billion, the company provides employers products and resources to plan and administer employee benefit programs serving customers worldwide.

Shares of this health insurance giant have underperformed the broader market considerably over the past year. UNH has declined 26.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 11.9%. In 2025, UNH’s stock fell 25.1%, compared to the SPX’s marginal decline on a YTD basis. 

Narrowing the focus, UNH’s underperformance is also apparent compared to the iShares U.S. Healthcare Providers ETF (IHF). The exchange-traded fund has declined about 6% over the past year. Moreover, the ETF’s 4.1% returns on a YTD basis outshine the stock’s double-digit losses over the same time frame.

The reason for UNH's underperformance can be traced back to a sudden increase in Medicare Advantage expenses, which caught the company off guard and led to a major setback. The primary issue was the higher-than-anticipated utilization of physician and outpatient services within UnitedHealthcare's Medicare Advantage plans. This heightened medical usage, coupled with regulatory uncertainties and reduced earnings projections, are constraining the company's short-term potential for growth. 

On Apr. 17, UNH shares closed down more than 22% after reporting its Q1 results. Its adjusted EPS of $7.20 fell short of Wall Street expectations of $7.27. The company’s revenue was $109.6 billion, falling short of Wall Street forecasts of $111.1 billion. UNH expects full-year adjusted EPS in the range of $26 to $26.50.

For the current fiscal year, ending in December, analysts expect UNH’s EPS to decline 5.7% to $26.09 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.

Among the 24 analysts covering UNH stock, the consensus is a “Strong Buy.” That’s based on 20 “Strong Buy” ratings, two “Moderate Buys,” and two “Holds.”

This configuration is less bullish than a month ago, with 21 analysts suggesting a “Strong Buy.” 

On Apr. 29, Baird analyst Michael Ha kept an “Outperform” rating on UNH and lowered the price target to $510, implying a potential upside of 34.7% from current levels.

The mean price target of $556.91 represents a 47% premium to UNH’s current price levels. The Street-high price target of $670 suggests a notable upside potential of 76.9%.