UnitedHealth Group reported adjusted fourth-quarter earnings of $2.11 per share, down sharply from $6.81 in the prior year but one cent above the consensus estimate of $2.10. Revenue rose 12% year over year to $113.215 billion, falling short of the Street’s $113.817 billion forecast. CEO Stephen Hemsley highlighted operational improvements and stronger core performance, yet investors focused on the significant compression in profit margins relative to last year’s unusually elevated base.

Shares plunged approximately 20% in a single session, erasing roughly $50 billion in market capitalization, after the Centers for Medicare & Medicaid Services proposed a meager 0.09% increase in 2027 Medicare Advantage reimbursement rates. As the largest provider in that program, UnitedHealth stands to face meaningful margin pressure. The company also guided to a 2% year-over-year revenue decline in 2026 and forecast membership reductions of up to 2.8 million in its UnitedHealthcare segment.

Despite the sharp downturn, major brokerages have largely held their Buy or Outperform ratings. Cantor Fitzgerald reiterated its Overweight view with a $440 price target, citing confidence in $17.86 of earnings per share in 2026 driven by margin expansion in both UnitedHealthcare and Optum Health. UBS kept its Buy rating while trimming its target from $430 to $410, Oppenheimer held Outperform at $385, and RBC Capital maintained Outperform but lowered its target to $361. Piper Sandler also cut its target to $396, noting execution on AI-driven cost controls and a return to a mid-single-digit EBIT margin as key catalysts.