The fuse of the incident stemmed from a sudden after-hours announcement on Tuesday: CEO Andrew Witty, who has been at the helm for many years, suddenly announced his resignation, and the company also withdrew its previously issued financial guidance for 2025 on the grounds that "the surge in medical demand has caused a sudden change in the operating environment". This move caused violent market turmoil, and the stock price plummeted the next day.
Bank of America analyst Joanna Gajuk pointed out in the research report that the management earthquake directly disrupted UnitedHealth's strategic deployment. She downgraded the company's rating from "buy" to "neutral" and slashed her price target from $560 to $350, a decrease of 37.5%. The analyst predicts that UnitedHealth's earnings per share in 2025 is expected to shrink by 10%-20% compared with the previous forecast. If compared with the original long-term target, the reduction will be as high as 21%-29%.
The research report particularly emphasized that the decision to withdraw the performance guidelines reflects two deep-seated worries: first, the management lacks a basis for judging the sustainability and coverage of rising medical expenses, and second, it needs to reserve sufficient time for the new CEO to reformulate the strategic plan. It is worth noting that UnitedHealth revealed in the conference call that it is planning to formulate a new bidding strategy in the next few months, with the goal of restoring an operating profit margin of 3%-5% in the Medicare Advantage Plan (MA) segment, but this may At the expense of stagnant or even loss of membership growth.
Regarding the industry impact that the market is concerned about, Gajuk believes that competitorsHamena(HUM.US) 's situation does not yet pose a systemic risk. She analyzed and pointed out that the current challenges faced by Hamena are more due to the company's own governance issues, and the lightning departure of the CEO of UnitedHealth is more like a signal of internal management disorder than a sign that the entire health management industry is facing headwinds.
This sudden management earthquake not only exposed the vulnerability of health insurance giants under the pressure of medical inflation, but also triggered the market to re-examine the valuation system of the medical sector. As the medical insurance bidding season approaches in 2025, the industry may usher in a new round of strategic adjustment cycle.
