What Happened?
Shares of health insurance company UnitedHealth (NYSE:UNH) fell 5.5% in the afternoon session after HSBC analysts downgraded the stock's rating from Neutral to Sell, adding that the recent sell-off had yet to provide a cheap opportunity to buy. The analysts also cited key reasons for the concerns, including "higher medical costs, political pressure on drug prices, and lower overall profitability ahead, especially if there are cuts to Medicaid spending.".
The shares closed the day at $303.10, down 5.7% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy UnitedHealth? Access our full analysis report here, it’s free.
What The Market Is Telling Us
UnitedHealth’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 16% on the news that the Wall Street Journal reported that the Justice Department was investigating the company for possible Medicare fraud. Such investigations typically trigger investor concern due to the potential for significant financial penalties, legal costs, and reputational damage.
UnitedHealth is down 40.1% since the beginning of the year, and at $302.25 per share, it is trading 51.7% below its 52-week high of $625.25 from November 2024. Investors who bought $1,000 worth of UnitedHealth’s shares 5 years ago would now be looking at an investment worth $1,054.
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