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UnitedHealth Group (UNH) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
In the latest trading session, Construction Partners (ROAD) closed at $13.75, marking a +0.22% move from the previous day.

UnitedHealth Group (UNH) closed at $245.92 in the latest trading session, marking a -0.89% move from the prior day. This change lagged the S&P 500's 0.04% loss on the day. At the same time, the Dow lost 0.05%, and the tech-heavy Nasdaq lost 0.01%.

Coming into today, shares of the largest U.S. health insurer had gained 3.59% in the past month. In that same time, the Medical sector gained 1.97%, while the S&P 500 gained 0.34%.

Investors will be hoping for strength from UNH as it approaches its next earnings release. The company is expected to report EPS of $3.47, up 10.51% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $60.61 billion, up 8.07% from the prior-year quarter.

UNH's full-year Zacks Consensus Estimates are calling for earnings of $14.71 per share and revenue of $243.86 billion. These results would represent year-over-year changes of +14.21% and +7.79%, respectively.

Any recent changes to analyst estimates for UNH should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.03% higher within the past month. UNH is currently a Zacks Rank #3 (Hold).

In terms of valuation, UNH is currently trading at a Forward P/E ratio of 16.87. For comparison, its industry has an average Forward P/E of 14.42, which means UNH is trading at a premium to the group.

Also, we should mention that UNH has a PEG ratio of 1.33. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. UNH's industry had an average PEG ratio of 1.04 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 8, which puts it in the top 4% 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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