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UnitedHealth (UNH) shares inched down on Thursday after the insurance giant confirmed the U.S. Justice Department is investigating its Medicare billing practices.
The DOJ is investigating whether the NYSE-listed firm artificially inflated Medicare reimbursements by overstating or exaggerating patient health conditions.
Including today’s decline, UnitedHealth stock is down more than 50% versus its year-to-date high.
Medicare Advantage Matters a Lot for UNH Shares
The DOJ’s probe adds to a long list of headwinds that have plagued UNH shares this year, including rising medical costs and unexpected management shakeup.
An investigation into the Medicare-focused business is significant for investors as it accounted for nearly one-third of the company’s overall revenue in 2024.
The investigation could result in fines, further damage to the insurer’s reputation, or even revised reimbursement policies, potentially leading to added pressure on UnitedHealth stock.
If the company is indeed found guilty of fraud in Medicare billing practices, it could shatter investor sentiment and trigger a further decline in its share price in the second half of 2025.
Is it Time to Sell UnitedHealth Stock Now?
According to Jared Holz, a Mizuho strategist, the DOJ investigation may not be an adequate reason to sell UnitedHealth shares since the possibility of a probe was well-telegraphed and didn’t really come as a shock for investors.
The investment firm maintains its “Buy” rating on the world’s largest health insurance firm with a $350 price target indicating potential upside of nearly 25% from here.
A historically low valuation and the management’s expectations that earnings will still grow in fiscal 2026 were cited as reasons for the bullish call on UNH stock in Mizuho’s latest research note to clients.
What’s also worth mentioning is that UnitedHealth insiders have actually been aggressive buyers of the healthcare stock through its ongoing turmoil in 2025.
UnitedHealth Remains a Wall Street Favorite
While things haven’t been pleasant for UnitedHealth stock for quite some time, it still hasn’t fallen out of favor with Wall Street analysts.
The consensus rating on UNH shares remains at “Moderate Buy” with the mean target of roughly $357 indicating potential upside of more than 25% from current levels.
