Prior views of unitedhealth unh q2

Unitedhealth Group The president and CEO Stephen Hemsley will face the first real evidence on Tuesday of his ability to recover the confidence of investors as the largest private insurer reports profits.

The Dow component has seen the price of its shares almost halfway since mid -May, with the actions in rhythm for its worst year in more than a decade, after the profits in its MEDICARE flagship program and the practices of Optum's health doctors collapsed. That led to the abrupt resignation of former CEO Andrew Witty, forcing the company to restore former CEO Hemsley to replace him and suspend the gain orientation. In addition to that, the company faces criminal and civil investigations of the Department of Justice on its Medicare billing practices.

As Unitedhealth faces challenges on multiple fronts, it is in a “perfect storm,” said Mizuho's values analyst Ann Hynes. Now, investors want to know how Hemsley plans to get the company of the whirlwind, after assuring them last June that “we are humbly determined to recover their trust and their trust.”

Here are three key things that investors will seek in the company's profit report.

More than the second quarter, analysts focus on the prospects of UnitedHealth for the whole year. Hemsley told investors that the company would provide an update on the 2025 profit guide, after suspending its prognosis in May.

Analysts expect UnitedHealth to publish adjusted profits of the entire year of $ 21.26 per share, according to LSEG's consensus estimates. Estimates vary from a minimum of $ 18 per share at a peak of $ 26.44 per share.

“Anything below $ 18, that would be seen as negative on the street,” Hynes said

RBC Capital Markets analyst Ben Hendrix, established his estimate above the consensus at $ 23.36, but said that Wall Street is still bassist in UnitedHealth.

“While we base our most optimistic perspective on the statement of the management that Medicare Advantage is still profitable with 3% of low level of the map margin in sight by 2026, the clients we have spoken have expressed their concern for the compression of the continuous margin in Optumhealth and the acceleration trend (medical cost) in the central advantage of Medicare,” he wrote in a note this month.

Analysts also focus on how the company plans to stabilize their medical practice unit, Optum Health. For years, he helped UnitedHealth to overcome his peers in his flagship program of Medicare Advantage, taking advantage of his 90,000 doctors employed or affiliates to treat patients with the UnitedHealth plans themselves.

“Duration investors were investing in United for the power of … Optum Health, the power that United addressed their own members of Medicare Advantage, extracting a considerable margin that they had not been able to before,” said Baird Michael Analist Michael Ha.

But in the first quarter of this year, Optum Health saw a strong decrease in profits. The analysts said that the fall was due in part to a change of the Biden era in the Medicare reimbursement standards known as V28, which makes it difficult for insurers and doctors to invoice additional services.

Mizuho Hynes said that previous billing coding rules left much more space for plans to add billing codes related to chronic conditions, such as general heart conditions, which would provide a higher risk score and a refund rate. According to the new V28 rule, billing codes are more specific, closing lagoons that could boost reimbursement.

“V28 is very black and white, so it does not have that kind of capacity to add codes, and many codes are eliminated,” he said, adding that he has now “led to a structural change in the margins for the health of Optum.”

But he pointed out that the V28 changes began in 2024, at a time when older people began to use more attention. Many of Medicare Advantage competitors in Unitedhealth made adjustments during the last year to address the change. The sudden collapse of Optum Health Margins in the first quarter seems to have captured Unitedhealth off guard.

“I think it is an example of mexecution. They knew that the front wind was heading a year and even long before that, but for one reason or another could not find the displacement,” said Ha. “We are still sure that Optum Health and United can recover and rebuild the economy of the unit, but we believe that in the next one or two years, it can get worse.”

The company was advanced to the profit report on Thursday, recognizing in a presentation of the SEC that its Billing Practices of the Medicare program face criminal and civil probes by the Department of Justice.

UnitedHealth said the company is cooperating with the investigations, reported by the Wall Street Journal. He also noted that in March, a special teacher appointed by the Court ruled in favor of the company in a case that involves similar accusations presented by the DOJ during the first Trump administration.

Hynes believes that the concern of investors for the probes of the Department of Justice has been exaggerated.

“The actions are quoted as the government will expel them from Medicare and Medicaid, and the probability that this is zero, in my opinion,” he said. “It will probably end with them by writing a check and making a corporate integrity agreement … that is what has happened in the past.”

But the death of the Executive of United Brian Thompson last December, that prosecutors allege that it was carried out by an armed man that was motivated by insurance denials, unleashed a land of public criticisms of health insurance practices.

Former complainant Wendell Potter, who has criticized industry's practices after a race in Cigna, said the pressure on large insurers such as Unitedhealth will probably not cease. The regulatory scrutiny in Congress has increased on both sides of the hall, since Washington fights with high health and drug costs in Medicare, Medicaid and other government health programs.

“Many of the members of Congress who are doctors or Republicans, some are pharmacists, and see the hard hand of these companies first hand,” said Potter, president of the health and democracy center. “And then you are seeing the interest of the Republicans, and I have not seen that before.”

In June, UnitedHealth announced that it had hired third -party auditors to review the company's practices in pharmacy health insurance and benefits services, in an effort “to provide our interested parties transparency and confidence” in the company's commercial practices.

The company told CNBC that it will not have many details to offer about that audit during the gain call of the second quarter. Do not expect the review to be completed until the end of the third quarter of this year.