UnitedHealth’s Commercial Unit: A Stabilizer Amid Healthcare Turmoil?

UnitedHealth Group Inc.
UNH is
currently navigating a challenging healthcare landscape,
with its Medicare Advantage business reportedly facing
regulatory scrutiny and rising care costs. However, amid all
the hurdles, its commercial insurance business is stepping up as a
vital source of stability.

As of March 31, 2025, the UnitedHealthcare business served
50.1 million people, representing a 1.9% year-over-year growth,
driven by its self-funded commercial benefits. With more than
30 million members, the company's commercial segment benefited from
favorable pricing and a healthier risk pool compared to government
plans. It showed consistent growth over time. Commercial plans are
available to both individuals and employers, have less volatile
cost structures and are less vulnerable to sudden changes in
regulations than Medicare Advantage.

After the return of former CEO Stephen Hemsley in May 2025, the
company is shifting its focus. As it works on tightening controls
and compliance in its Medicare operations, UNH is also putting a
strong emphasis on growing its commercial portfolio.

Even though UNH has pulled back on its full-year guidance due to
ongoing pressures, the commercial division continues to provide a
buffer against uncertainty. With the broader economy facing
challenges that affect both consumers and providers, the company's
approach, particularly the strong performance of its
commercial business, continues to anchor its financial
stability.

How Are Competitors Faring?

Some of UNH's major competitors in the healthcare plan provider
space are
Molina Healthcare, Inc.
MOH and
The Cigna Group
CI.

Molina Healthcare recently warned about rising medical costs and
erratic utilization trends, which led it to cut its 2025 earnings
guidance. In contrast to its previous prediction of at least
$24.50, Molina now projects adjusted earnings per share for the
entire year to be between $21.50 and $22.50. Molina now projects
adjusted earnings of about $5.50 per share for the second quarter
of 2025.

By strategically selling its Medicare Advantage, Cigna
Supplemental Benefits, Medicare Part D, and CareAllies businesses
to HCSC in March 2025, Cigna has differentiated itself. Its
commercial-heavy model will provide clearer short-term visibility
and more consistent underwriting performance. Cigna reported
impressive results in the first quarter of 2025, driven by premium
rate increases and strengthened relationships with
existing clients.

UnitedHealth's Price Performance, Valuation &
Estimates

Shares of UNH have plunged 39.9% in the year-to-date period
compared with the

industry's decline of 32.3%.

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Source: Zacks Investment Research

From a valuation standpoint, UnitedHealth trades at a forward
price-to-earnings ratio of 12.85, above the industry average of
11.5. UNH carries a

Value Score of B.

Image
Source: Zacks Investment Research

The Zacks Consensus Estimate for UnitedHealth's 2025 earnings is
pegged at $21.85 per share, implying a 21% dip from the year-ago
period.

Image
Source: Zacks Investment Research

The stock currently carries a Zacks Rank #5 (Strong Sell).

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UnitedHealth Group Incorporated (UNH): Free Stock Analysis
Report

Molina Healthcare, Inc (MOH): Free Stock Analysis Report

Cigna Group (CI): Free Stock Analysis Report

This article originally published on Zacks Investment Research
(zacks.com).

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