Could UnitedHealth Group's Stock Reach $552 by the Year 2025?
UnitedHealth Group, a prominent healthcare company offering health insurance through UnitedHealthcare and health services via Optum, serves over 50 million individuals in the U.S. In Q1 2025, the company reported revenues of $109.6 billion. However, it is currently under investigation by the U.S. Department of Justice for potential Medicare fraud in its Medicare Advantage business, although the company has not received official notification.
Simultaneously, the Federal Trade Commission has filed a lawsuit against pharmacy benefit managers, including those associated with UnitedHealth, accusing them of inflating insulin prices through rebate schemes. The U.S. government has also implemented measures to reduce drug prices and protect domestic pharmaceutical innovation, raising regulatory scrutiny for healthcare companies.
Analysts remain optimistic about UnitedHealth's future, maintaining a "Strong Buy" consensus rating and an average price target of $392.59. Some analysts, like Piper Sandler, anticipate the insurance giant to reach $552 per share.
The company's annual dividend stands at $8.40 per share, offering a yield of 2.82%. Despite a 40% drop in year-to-date (YTD) performance and a 4% decline over the past 5 years, UnitedHealth's valuation remains affordable, with a forward adjusted price-to-earnings ratio of 13.05 - about a 37% discount to its own 5-year average.
In Q1, UnitedHealth reported earnings of $6.85 per share (or $7.20 on an adjusted basis), with revenues climbing 9.8 billion year-over-year to $109.6 billion. The company added 780,000 consumers to UnitedHealthcare so far this year, and Optum Health expects to add 650,000 new value-based care patients in 2025.
Medical care ratio rose slightly to 84.8%, primarily due to increased senior care activity and Medicare funding changes. Operating costs improved, dropping to 12.4% from 14.1%, thanks to efficiencies across UnitedHealthcare and Optum. Cash flow from operations hit $5.5 billion, with nearly $5 billion returned to shareholders through dividends and share buybacks, resulting in a strong return on equity of 26.8%.
Optum Health earned $25.3 billion in revenue, although growth was partially offset by contract changes and shifts in member profiles. Optum Insight brought in $4.6 billion, with a revenue backlog of $32.9 billion and new AI-powered claims processing tools boosting productivity by over 20%. Optum Rx reported strong results, with revenues climbing to $35.1 billion, and adjusted prescriptions increasing to 408 million from 395 million last year.
UnitedHealth's leadership changed significantly in May 2025, with CEO Andrew Witty stepping down for personal reasons. The company suspended its full-year financial outlook due to higher-than-anticipated medical costs, particularly in Medicare Advantage. Stephen Hemsley, who previously led the company from 2006 to 2017, stepped in immediately as interim CEO, demonstrating confidence in the company's future. Hemsley even purchased approximately $25 million worth of shares, sending a positive signal to the market.
While the exact nature of the DOJ's civil investigation remains unclear, some analysts see the transition of leadership as a potential catalyst. Piper Sandler analyst Jessica Tassan reaffirmed her "Overweight" rating on UNH, with a $552 price target that implies potential 82% upside. Tassan believes Hemsley's familiarity with the company will help navigate current challenges and position UnitedHealth for long-term success.
Despite the ongoing investigations and leadership changes, Wall Street has a strongly positive consensus on UNH stock. All 24 surveyed analysts have assigned a "Strong Buy" rating, with the average price target at $392.59. Whether UnitedHealth Group can hit $552 in 2025 remains uncertain due to current headwinds and legal pressures, but a steady recovery to the mid-$300s range seems more likely in the near term. If the company executes well on cost management and growth initiatives, reaching that goal may still be possible.
Note: During the cited periods, UnitedHealth Group was under investigation for alleged criminal healthcare fraud by the U.S. Department of Justice. Although the investigation was not formally disclosed to the company at the time, media reports later confirmed the federal probe into the company's Medicare Advantage program. UnitedHealth has publicly contested the allegations, but the investigation has contributed to market volatility and scrutiny.
- Analysts, such as Piper Sandler, foresee UnitedHealth's investment potential, with a projected share price of $552, given the interim CEO's familiarity with the business and the company's ongoing cost management and growth initiatives.
- UnitedHealth's business ventures extend beyond healthcare to finance, as they engage in investing activities, for instance, through pharmaceutical business segments like Optum Rx, where revenues have climbed to $35.1 billion.
