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UnitedHealth Group (UNH) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, UnitedHealth Group (UNH) closed at $286.28, marking a +0.4% move from the previous day. The stock lagged the S&P 500's daily gain of 0.83%. Meanwhile, the Dow gained 0.62%, and the Nasdaq, a tech-heavy index, added 1.43%.

Wall Street will be looking for positivity from UNH as it approaches its next earnings report date. On that day, UNH is projected to report earnings of $4.78 per share, which would represent year-over-year growth of 32.78%. Meanwhile, our latest consensus estimate is calling for revenue of $63.96 billion, up 5.55% from the prior-year quarter.

UNH's full-year Zacks Consensus Estimates are calling for earnings of $16.24 per share and revenue of $259.10 billion. These results would represent year-over-year changes of +7.48% and +7%, respectively.

Investors might also notice 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 remained stagnant. UNH is currently a Zacks Rank #3 (Hold).

Investors should also note UNH's current valuation metrics, including its Forward P/E ratio of 17.56. This valuation marks a premium compared to its industry's average Forward P/E of 16.2.

It is also worth noting that UNH currently has a PEG ratio of 1.4. 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. The Medical - HMOs industry currently had an average PEG ratio of 1.23 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 92, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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