UnitedHealth Group Inc (NYSE: UNH) reported solid results Wednesday for the fourth quarter of 2019, beating earnings expectations.
The 2020 guidance was not raised, as the company tends to be conservative early in the year, and “investors should not read anything else into this,” according to Cantor Fitzgerald.
The UnitedHealth Analyst
Steven Halper maintained an Overweight rating on UnitedHealth with a $315 price target.
The UnitedHealth Thesis
UnitedHealth reported quarterly revenue of $61 billion, in-line with expectations, and earnings of $3.90 per share versus the consensus estimate of $3.78, Halper said in a Wednesday note. (See his track record here.)
The company’s Optum business recorded 8% revenue growth, with OptumHealth’s revenue growing more than 30%; OptumInsight growing revenue by 14%; and OptumRx remaining flat due to a large client transition, the analyst said.
Despite this client transition, OptumRx continues to record above-market growth rates, suggesting “strong market share gains and cross sales realizations,” Halper said. The company’s free cash flow generation was impressive, he said.
UnitedHealth continues to be “the most diversified insurer in our coverage list, is nicely diversified outside of insurance with its Optum segment and should generate significant free cash flow in 2020,” the analyst said.
Cantor Fitzgerald expects Optum to continue to generate solid growth.
UnitedHealth Price Action
UnitedHealth shares were trading 3.01% higher at $296.71 at the time of publication Wednesday.
Latest Ratings for UNH
View More Analyst Ratings for UNH
View the Latest Analyst Ratings
See more from Benzinga
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.