Here’s some Wall Street logic for you: UnitedHealth Group posted $5.5 billion of profit in the fourth quarter, bringing its total profit to more than $22 billion in 2023. That was up more than 11% year over year. UnitedHealth has more money that it knows what to do with it. But the stock market punished the company’s stock price by more than 3% on Friday after it reported those earnings.
Stock prices mostly reflect future earnings, not just present earnings. And investors are worried about UnitedHealth’s short-term future. That’s because, yet again, UnitedHealth said its insurance members — particularly older adults on Medicare Advantage — have been seeing the doctor a ton. Increased “utilization” has been the message for the past six months now.
“Investors will remain squarely focused [near term] on utilization trends in the Medicare complex,” Scott Fidel of Stephens wrote in a research note Friday.
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