UnitedHealth Stock Down 15.9% in 3 Months: Should You Hold or Fold?

Group 1 - UnitedHealth Group's shares have declined 15.9% over the past three months, outperforming the industry's decline of 17.5% [1] - Competitors Elevance Health and Centene Corporation experienced declines of 31.9% and 23.6%, respectively, while the S&P 500 Index rose 6.5% during the same period [1] - The insurance industry faces mounting public criticism and legislative pressures, impacting investor confidence [3] Group 2 - UnitedHealth is trading at a forward 12-month price/earnings ratio of 16.33, higher than its five-year median of 19.20 and the industry average of 13.75 [4] - The company projects revenues of $450-$455 billion for 2025, with Optum and UnitedHealthcare sales estimated at $277-$280 billion and $337-$340 billion, respectively [7] - Adjusted earnings per share for 2025 are forecasted to be $29.50-$30, compared to $27.50-$27.75 in 2024 [8] Group 3 - Growth drivers for UnitedHealth include rising commercial membership, expansion in Optum Health's value-based care, and new client acquisitions for Optum Rx [9] - The company generated operating cash flows of $21.8 billion in the first nine months of 2024, despite a cyber-attack on its Change Healthcare business [10] - UnitedHealth raised its quarterly dividend by 12$9.6 billion to shareholders through buybacks and dividends in the first nine months of 2024 [11] Group 4 - Healthcare spending in the U.S. is increasing due to rising disease prevalence, positioning UnitedHealth to benefit from this trend [12] - UNH's 2024 and 2025 earnings estimates have been revised downward due to rising medical costs and other factors [13] - Despite challenges, UnitedHealth's diversified revenue streams and robust cash flow generation provide a solid foundation for long-term growth [19]