UNH Stock Soars 50% From Crash, Attempts Trend Reversal on Medicare Strength
With this week's spike suggesting that the protracted decline may now be giving way to a long-term recovery, UnitedHealth Group (NYSE: UNH)
Quick overview
- UnitedHealth Group is showing signs of a turnaround, with shares up nearly 50% since late July.
- A strong Medicare enrollment outlook and Berkshire Hathaway's investment have boosted investor confidence.
- Despite mixed Q2 results, the company confirmed a dividend, signaling financial stability.
- The upcoming October earnings report will be crucial for confirming the sustainability of this recovery.
With this week’s spike suggesting that the protracted decline may now be giving way to a long-term recovery, UnitedHealth Group (NYSE: UNH) is displaying indications of a significant turnaround.
Stock Performance and Technical Momentum
UnitedHealth shares ended the latest session at $320.37, rising 1.58% from the previous close. The stock is now up 10% for the week and nearly 50% higher than late July’s low of $233.
A decisive move above the 20-week SMA (gray) has strengthened bullish sentiment, suggesting that the long slide since April may have bottomed. The sharp 8% jump today to over $347 has further reinforced the case for a potential trend reversal.
UNH Chart Weekly – The 20 SMA Has Been Broken
Medicare Enrollment and Government Payments
The latest push higher followed management’s update that 78% of UnitedHealth’s members are expected to enroll in highly rated Medicare Advantage plans next year.
This strong enrollment outlook matters because higher plan ratings translate into larger bonus payments from the federal government—potentially worth billions. The news helped restore confidence in UNH’s fundamentals and pushed shares firmly into recovery territory.
Berkshire’s Strategic Move
Investor confidence was also buoyed by Berkshire Hathaway’s 13F filing, which revealed a stake of over five million UNH shares valued at $1.6 billion as of June 30. The investment, led by Warren Buffett, was initially tested by UnitedHealth’s disappointing Q2 results but is now approaching breakeven as shares rebound.
This endorsement from Berkshire acted as a stabilizer after months of turbulence tied to litigation risks, margin compression, and rising medical costs.
Mixed Q2 Results and Investor Concerns
UnitedHealth’s Q2 performance highlighted the company’s dual challenges:
- Revenue growth in Optum Rx and commercial memberships was robust.
- Earnings per share, however, fell short of expectations as higher medical expenses eroded margins.
The market remains wary that costs are outpacing pricing power, and concerns around reduced earnings outlooks and weaker margins have kept investor sentiment cautious. Analysts now forecast 2025 revenue of $448.87 billion and EPS of $16.21, pointing to revenue pressure but modest profitability growth.
Dividend Support and Market Sentiment
Adding to investor optimism, UnitedHealth confirmed a $2.21 per-share dividend. The payout not only signals financial stability but also reassured shareholders at a time of elevated inflation worries and broad market unease.
This dividend support, alongside Berkshire’s visible vote of confidence and robust Medicare enrollment projections, has created a platform for UNH’s recent 10% weekly surge.
Conclusion: After months of steep losses, UnitedHealth’s stock appears to be turning a corner. Strong Medicare plan growth, Buffett’s investment, and technical strength above key support levels suggest momentum is shifting back in favor of the bulls.
However, the road ahead will depend on the October earnings report, where investors will look for proof that UnitedHealth can contain rising medical costs while delivering consistent profit growth. A solid performance could confirm that the worst is behind the health insurance giant—and that this rally marks the start of a longer-term recovery.
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