UnitedHealth Shares Plummet on Derivative Lawsuit Allegations
UnitedHealth Group's (NYSE:UNH) shares have fallen 4.11% since a derivative lawsuit was filed on August 7, which accuses the company of lapses in Medicare Advantage coding and decisions on coverage, privacy, and cybersecurity measures at Change Healthcare.
The amended complaint, submitted by the Employees' Retirement System of Rhode Island and Länsförsäkringar Fondförvaltning AB, claims that internal reviews identified no less than $200 million in Medicare diagnoses or claims lacking support prior to the suspension of the program. The lawsuit does not specify an amount of damages.
Despite the governance concerns, UnitedHealth's operational performance has shown improvement, with a 55.2% increase in operating earnings and a 61.0% jump in attributable net income in its second-quarter report. Management increased its 2026 guidance, projecting adjusted EPS between $19.50 and $20.00.
The median price target of FactSet suggests a potential 25.5% gain from the current market price. Analysts have widely upgraded their targets for UNH, with 19 out of 24 analysts assigning a Buy or Overweight rating.