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UnitedHealth Group (UNH) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

UnitedHealth Group (UNH) closed at $303.97 in the latest trading session, marking a +0.07% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.21%. Elsewhere, the Dow lost 0.58%, while the tech-heavy Nasdaq lost 0.46%.

Wall Street will be looking for positivity from UNH as it approaches its next earnings report date. The company is expected to report EPS of $4.78, up 32.78% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $63.96 billion, up 5.55% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $16.24 per share and revenue of $259.10 billion, which would represent changes of +7.48% and +7%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for UNH. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.23% lower. UNH is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, UNH is currently trading at a Forward P/E ratio of 18.7. For comparison, its industry has an average Forward P/E of 17.71, which means UNH is trading at a premium to the group.

We can also see that UNH currently has a PEG ratio of 1.5. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - HMOs was holding an average PEG ratio of 1.34 at yesterday's closing price.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 46, putting it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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