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

Zacks Equity Research
Marvell Technology (MRVL) closed the most recent trading day at $22.60, moving +0.89% from the previous trading session.

UnitedHealth Group (UNH) closed the most recent trading day at $237.29, moving +0.25% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.21%. Meanwhile, the Dow lost 0.09%, and the Nasdaq, a tech-heavy index, lost 0.18%.

Prior to today's trading, shares of the largest U.S. health insurer had lost 12.01% over the past month. This has lagged the Medical sector's gain of 1.11% and the S&P 500's gain of 1.81% in that time.

Investors will be hoping for strength from UNH as it approaches its next earnings release. On that day, UNH is projected to report earnings of $3.58 per share, which would represent year-over-year growth of 17.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $59.66 billion, up 8.11% from the year-ago period.

UNH's full-year Zacks Consensus Estimates are calling for earnings of $14.62 per share and revenue of $244.23 billion. These results would represent year-over-year changes of +13.51% and +7.95%, respectively.

Investors should also note any recent changes to analyst estimates for UNH. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. UNH is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that UNH has a Forward P/E ratio of 16.19 right now. This valuation marks a premium compared to its industry's average Forward P/E of 15.3.

We can also see that UNH currently has a PEG ratio of 1.21. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UNH's industry had an average PEG ratio of 1.11 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 25, which puts it in the top 10% 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.

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


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