Investing.com -- Shares of UnitedHealth Group (NYSE:UNH) are down more than 7% in premarket trading on Thursday after it was reported that the U.S. Department of Justice is conducting a criminal investigation into the company’s Medicare business.

The Wall Street Journal reported, citing sources, that the Justice Department has been investigating UnitedHealth since last summer for possible Medicare fraud.

Advertisement: High Yield Savings Offers

Earn 4.10% APY** on balances of $5,000 or more  View Offer

Earn up to 4.00% APY with Savings Pods  View Offer

Earn up to 3.80% APY¹ & up to $300 Cash Bonus with Direct Deposit  View Offer

Powered by Money.com - Yahoo may earn commission from the links above.

The probe has raised broader concerns on Wall Street, with Mizuho warning that UnitedHealth’s volatility and steep market value losses could lead to its removal from the Dow Jones Industrial Average.

“Given recent price action of UNH shares, losing more than $300bn of its $600bn market-cap in just one month, we believe there is some risk that the name is removed from the Dow,” Mizuho analysts wrote in a note Thursday.

They cited the index’s tendency to exclude companies that exhibit “heightened volatility” or have become “less relevant as major examples of the economy.”

Recent high-profile removals from the Dow include Intel (NASDAQ:INTC), Dow Inc (NYSE:DOW)., ExxonMobil (NYSE:XOM), and  Pfizer  (NYSE:PFE).

Mizuho noted that while the full implications of the DOJ investigation remain unclear, the uncertainty could have financial and management consequences.

“The DOJ investigation itself… introduces a period of less clarity and may produce financial penalties/ramifications as well,” they wrote.

Despite the legal overhang, Mizuho pointed to some longer-term positives. The firm highlighted that UnitedHealth still expects earnings to grow in fiscal 2026, helped by improved cost trends and stronger Medicare Advantage rates.

Related articles

UnitedHealth stock falls on criminal probe, Mizuho sees risk of Dow removal

Roth MKM starts Rubrik at Buy; Mizuho downgrades on valuation concerns

Tech rally in U.S. and China stocks gaining traction as tariffs ease

View Comments