UnitedHealth Group raised its annual profit forecast, aiming for growth in 2026 and beyond under new CEO Stephen Hemsley. Despite optimism, shares remained flat. The path to recovery in Medicaid business may be challenging. Hemsley is working to regain trust after a difficult period. Profit forecast for 2025 raised to at least $16.25 per share.

Behavioral health, specialty drugs, and home-health services drove higher costs for Medicaid plans. Analysts expect a 2026 profit of $17.59 per share. CFO Wayne Devedyt plans to reduce clinical service locations through Optum Health. Shifting to narrower doctor networks will improve profit margins. Medical costs remain high, but UnitedHealth is cleaning up under new management.

For the third quarter, the company’s medical loss ratio was 89.9%, in line with expectations. Optum health services unit revenue was flat at $25.9 billion. Optum Rx revenue rose 16% to $39.7 billion. Adjusted earnings were $2.92 per share, beating estimates. Analysts are encouraged by the results, suggesting a potential reversion to consistent beats and upward revisions.

Read more at Yahoo Finance: UnitedHealth raises 2025 profit forecast, expects 2026 pressure on Medicaid business