02:00 PM EDT, 05/14/2025 (MT Newswires) -- UnitedHealth Group's ( UNH ) move to suspend its full-year outlook prompted BofA Securities to downgrade the company's stock on Wednesday as the brokerage awaited clarity on multi-year Medicare Advantage repricing.

The health insurance giant's decision on Tuesday to pull its outlook came amid higher-than-expected medical costs. At the time, it named Stephen Hemsley as its new chief executive, succeeding Andrew Witty.

BofA downgraded UnitedHealth's ( UNH ) shares to neutral from buy and slashed the price target to $350 from $560. The stock, which was little changed in Wednesday's trading session after sliding 18% on Tuesday, has lost 38% so far this year.

"We view the decision to pull the 2025 guide as a combination of uncertainty around the prevalence and persistence of ... higher (medical) utilization as well as giving the incoming CEO additional time to become comfortable around the 2025 guidance he is now responsible for," BofA analyst Joanna Gajuk said in a note.

The guidance suspension comes as Medicare Advantage trends have gotten significantly worse than those called out on the first-quarter call, Gajuk said. The brokerage awaits clarity regarding "bid strategy and potential multi-year return to normalized (Medicare Advantage) margins," she said.

BofA pegs UnitedHealth's ( UNH ) 2025 earnings per share at $21 to $23.63. In April, UnitedHealth ( UNH ) lowered its EPS guidance to a range of $26 to $26.50 for 2025. The current consensus on FactSet is for $24.22.

UnitedHealth ( UNH ) still expects "to return to EPS growth in 2026 and to return (Medicare Advantage) to 3-5% margins, which may come with flat/negative (Medicare Advantage) member growth in order to restore margin as they prepare for their bid strategy in the coming weeks," according to the BofA note.

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