UnitedHealth Earnings: Shares Fall Further, Despite 2026 Profit Guidance in Line With Expectations

Key Morningstar Metrics for UnitedHealth Group

• Fair Value Estimate: $427.00
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: High

What We Thought of UnitedHealth Group’s Earnings

After a disappointing Medicare Advantage initial rate notice after hours on Jan. 26, UnitedHealth Group UNH reported its fourth-quarter results and provided EPS guidance for 2026 of greater than $17.75, or roughly in line with initial expectations. Shares fell nearly 20% in early trading on Jan. 27, though.

Why it matters: Some of that movement was related to the disappointing initial MA rate announcement (down 9% overnight), but the 2026 guidance pushed shares down further, as revenue looked lighter than expected and investors may have to wait longer than hoped for a big profit turnaround.

• The flat initial MA rate notice was weaker than the mid-single-digit rate growth we expected for that market. Positively, though, the Centers for Medicare & Medicaid Services has already noted the potential for an upward revision in the final notice expected by early April. Outsize risk adjustments for 2027 may normalize in future years.
• For 2026, the high-single-digit adjusted EPS growth outlook looks in line with our expectations. Investors may have been disappointed by the expected 2% revenue decline and by profit growth below its typical 13%-16% EPS growth goal, especially off a very weak base in 2025.

The bottom line: At first glance, we are keeping our $427 fair value estimate intact on these in line profit expectations for 2026. We continue to view narrow-moat UnitedHealth shares as undervalued, especially after the big decrease in early trading.

• However, UnitedHealth’s turnaround may wind up being a multiyear effort at which regulators continue to throw hurdles, and this is reflected in our High Uncertainty Rating that directly affects the margin of safety we would require to invest in shares.
• Further risks surround its MA and pharmacy benefit manager businesses. On the MA front, regulators may fine industry players for aggressive past risk assessments, creating the potential for future outflows and headline risk. Additional PBM business model changes are possible, too.