Morgan Stanley has projected a decline in UnitedHealth (UNH) shares following the company's announcement of increased Medicare Advantage usage, which has led to a downward revision of its 2025 earnings per share (EPS) guidance. The healthcare giant reduced its EPS forecast by 12%, setting a new range of $26.00 to $26.50, a significant drop from the previous range of $29.50 to $30.00. This revision is notably lower than Morgan Stanley's pre-announcement estimate of $29.85 and the FactSet consensus of $29.72.
UnitedHealth's management highlighted the lowered EPS guidance for fiscal year 2025 as a critical update, impacting the outlook for the Medicare Advantage segment. This development is also affecting peer companies such as Humana (HUM), CVSHealth (CVS, Financial), and Elevance Health (ELV), as noted by analysts.
Despite this downward adjustment, Morgan Stanley maintains an Overweight rating on UnitedHealth shares, with a price target of $664, as investors await further insights from the company's upcoming earnings call.
