UnitedHealth Group is counting on the leadership of Stephen Hemsley to restore investor confidence after a turbulent year that saw the company miss earnings estimates for the first time since 2008.
Hemsley, who led UnitedHealth from 2006 to 2017, returned as CEO in May, signing a three-year deal that includes $60 million in potential stock compensation and an additional $25 million personal investment in company shares.
The move has been well received by investors, including Warren Buffett’s Berkshire Hathaway, which has increased its stake in the health insurance giant.
Medicare Advantage Exit Seen as Profit Catalyst
One of the first major strategic shifts under Hemsley involves UnitedHealth’s decision to withdraw from about 200 Medicare Advantage plans across 109 U.S. counties.
The company said the exits would allow it to focus on smaller, more efficient networks centered around Optum’s 90,000-physician system.
Investors believe this streamlining could improve margins and reduce exposure to cost volatility.
Kevin Gade, COO at Bahl and Gaynor, which holds over 680,000 shares, said the move “should help balance the cost per patient without deteriorating quality.”
Leadership Changes Inspire Investor Optimism
Analysts have responded positively to Hemsley’s return and the addition of Wayne DeVeydt as CFO, predicting stronger operational performance in 2026.
UnitedHealth’s stock has rallied nearly 50% since May, rebounding to $362.50, though it remains 30% lower year-to-date and 40% off its record high of $631.
Stephanie Link, chief investment strategist at Hightower Advisors, expects the company’s insurance business to recover profit margins by 2026, driven by better cost controls and improved execution at Optum.
Outlook and Analyst Projections
According to LSEG data, analysts forecast third-quarter earnings of $2.82 per share and expect full-year 2025 profits to reach $16.20 per share.
Since the disappointing second-quarter report, at least eight analysts have raised their price targets, citing UnitedHealth’s renewed focus and leadership stability.
As Hemsley works to rebuild the “beat-and-raise” performance pattern that once defined UnitedHealth’s dominance, the company faces the dual challenge of managing costs and restoring trust in its long-term strategy.