UnitedHealth Group's shares up over 4% amid higher 2025 profit forecast, aims for growth in 2026

American healthcare and insurance major, the UnitedHealth Group's shares rose more than 4 per cent in pre-market trading on October 26 as the company kept costs in check and upped its annual profit forecast from $16/share to $16.25 each, Reuters reported.

In its Q3 earnings, the company beat Wall Street analysts' expectations of $16.20 earnings per share and adjusted its profit forecast to at least $16.25 per share, up from its previous forecast of at least $16.00, Reuters reported using LSEG data.

Further, the company signalled turnaround efforts by new CEO Stephen Hemsley, with the aim to grow in 2026, it added.

Management change under new CEO Stephen Hemsley

Stephen Hemsley, who returned as CEO in May after leading the company from 2006 to 2017, has been working to regain investor and consumer trust after a difficult period for UnitedHealth that included the murder of a top executive, an unexpected surge in medical costs, a federal probe, and Americans' anger at insurance industry practices, the report said.

Hemsley said the company is focused on strengthening performance and positioning itself for “durable and accelerating growth in 2026 and beyond. "

He was brought in as a part of a management shakeup after the company's first earnings miss in over a decade in April.

“The management is being smart here with being deliberate and conservative and they just don't want to put themselves in a position where they have to cut the guidance again,” James Harlow, senior vice president at Novare Capital Management, told Reuters, adding that the modest forecast raise at least “signals a floor for investors to kind of work off of”.

Analysts on average expect 2026 profit of $17.59 per share.

Shares of rivals CVS Health and Elevance rose 2 per cent.

Medical costs remain elevated

The healthcare conglomerate said it continues to see elevated costs, which the industry has been struggling with for more than two years.

UnitedHealth has begun the process of cleaning up the business under new management, and the results suggest trends are on track, said Oppenheimer analyst Michael Wiederhorn.

For the third quarter, the company's medical loss ratio — the percentage of premiums spent on medical care - stood at 89.9 per cent, in line with company expectations and analysts' estimates of 89.87 per cent. Health insurers typically aim for a ratio closer to 80 per cent.

Quarterly revenue at the Optum health services unit was flat compared with a year ago at $25.9 billion.

Revenue at Optum Rx, UnitedHealth's pharmacy benefit manager, rose 16 per cent to $39.7 billion, partly helped by higher prescription volumes.

On an adjusted basis, the company earned $2.92 per share for the quarter, beating analysts' average estimate by 13 cents.

(With inputs from Reuters)