It’s inaccurate to call the largest health insurer in the country and the fourth-largest healthcare company by market cap an underdog. However, UnitedHealth Group(NYSE: UNH) looked more like an underdog in 2025 than it has in quite a while.
Shares of the healthcare giant are still down more than 30% year to date, after plunging as much as 53% at one point. Should investors avoid this beaten-down stock? Nope. I predict that UnitedHealth Group stock will soar in 2026.
Image source: Getty Images.
Admittedly, 2025 is a year that most UnitedHealth Group shareholders will probably want to forget. The health insurance stock could have been a poster child for Murphy’s Law: Nearly everything that could go wrong did go wrong.
UnitedHealth Group lowered its 2025 full-year earnings guidance in April. The company highlighted two primary culprits: higher-than-expected utilization in its Medicare Advantage plans and “unanticipated changes in the profile of Optum Health members impacting planned 2025 reimbursement.”
The situation worsened less than a month later. UnitedHealth suspended its 2025 outlook altogether due to medical costs rising significantly more than anticipated. CEO Andrew Witty also unexpectedly left the company “for personal reasons.”
To add insult to injury, The Wall Street Journal reported that UnitedHealth was the subject of a U.S. Department of Justice criminal investigation. Although the DOJ had not contacted the company at that point, the reports ultimately proved to be accurate.
With all of this bad news, why do I think UnitedHealth Group stock will soar in 2026? I believe that the issues plaguing UnitedHealth are only temporary in nature.
Health insurers have an easy solution when medical costs exceed their projections: increase premiums. That’s precisely what UnitedHealth is doing. Stephen Hemsley, who returned to run the company following Witty’s exit last year after previously serving as CEO from 2006 to 2017, said in the third-quarter earnings call, “Repricing within UnitedHealthcare is on track to drive solid operating earnings growth from margin improvement within that business in 2026.”
Granted, the challenges for Optum can’t be addressed as quickly. Hemsley acknowledged this in the Q3 call, stating that initiatives to turn things around within the segment “will show more measured progress in 2026 and will take more time to fully bear fruit.”
Still, I fully expect UnitedHealth will deliver solid earnings growth next year. As earnings go, so go share prices (eventually, anyway).
Investors are also forward-looking. They will look for UnitedHealth’s earnings growth to further accelerate in 2027 and beyond. I think that’s a reasonable assumption. Importantly, the company doesn’t necessarily have to deliver this higher growth before the stock moves in anticipation of it.
What about the DOJ investigation? I doubt that it will be resolved by the end of next year. This process may take some time to complete. UnitedHealth Group has previously endured a civil investigation by the DOJ, which took a decade to conclude.
The good news, though, is that a Special Master appointed by the court in that case didn’t find any evidence of wrongdoing by the company. Even if UnitedHealth doesn’t have as positive an outcome with the current DOJ investigation, it could still emerge relatively unscathed.
Making predictions is a risky business. There’s always a chance you could be wrong. I’ll readily admit that my prediction about UnitedHealth Group stock soaring next year may not come to pass.
If the stock doesn’t enjoy strong momentum, I suspect it could be due to one reason. I’m confident that UnitedHealth’s earnings will grow in 2026. However, the growth may not be sufficient to capture investors’ attention if the current bull market continues to roar. In such an environment, UnitedHealth may not look as attractive compared to higher-growth stocks.
On the other hand, a market downturn could actually work to UnitedHealth’s advantage. Investors could view the company’s stability and improving bottom line more favorably. Whatever happens, I don’t think anyone will see UnitedHealth Group as an underdog in 2026.
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