UnitedHealth’s New CEO Pledges Fixes To Win Back Investor Trust At Annual Meeting

UnitedHealth Group’s (UNH) new CEO, Steve Hemsley, pledged to restore investor trust during the company’s annual shareholder meeting Monday, acknowledging the insurer’s missteps following a rare earnings miss and a steep drop in market value.

“We are well aware we have not fulfilled your expectations or our own,” Hemsley said, as cited by Reuters. “We apologize for that performance, and we're humbly determined to earn back your trust and your confidence.”

Hemsley took over in May after the departure of Andrew Witty, who stepped down following UnitedHealth’s first quarterly earnings miss since 2008. 

The company also withdrew its full-year guidance, citing higher-than-expected medical costs in its Medicare Advantage business, which serves seniors and individuals with disabilities. The stock has lost about half its value since April.

At the meeting, Hemsley stated that the company is reevaluating its approach to forecasting medical trends and plans to incorporate higher care costs into its commercial and Medicare Advantage offerings next year. 

He noted that UnitedHealth is reviewing processes across all business units, including Optum Rx and UnitedHealthcare, and has already factored recent results into its bids for 2025 Medicare contracts.

According to a Wall Street Journal report, Hemsley also emphasized the need for structural changes, including the use of independent experts to assess controversial practices such as documentation of patient diagnoses in Medicare billing, prior authorization in managed care, and pharmacy benefit services. 

“Clearly, we have gotten things wrong,” he said, adding that the company had “underestimated medical costs” and allowed “outsized growth.”

Also on Monday, Barclays lowered its price target on UnitedHealth shares to $350 from $362, warning of downside risk tied to Medicare Part D and ACA-related businesses, as per TheFly. 

KeyBanc also cut its target to $400 from $450 but maintained an ‘Overweight’ rating, stating that the stock may have overcorrected and still represents long-term value.

UnitedHealth Group’s stock edged 0.11% lower in afternoon trade on Monday. The stock has fallen more than 40% this year and 38% over the past 12 months. 

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