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UnitedHealth Group (UNH) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, UnitedHealth Group (UNH) closed at $232.46, marking a +0.77% move from the previous day. This move outpaced the S&P 500's daily gain of 0.03%. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq lost 0.04%.

Prior to today's trading, shares of the largest U.S. health insurer had lost 5.15% over the past month. This has lagged the Medical sector's loss of 1.69% and the S&P 500's gain of 2.25% 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 $3.77 per share, which would represent year-over-year growth of 10.56%. Meanwhile, our latest consensus estimate is calling for revenue of $59.96 billion, up 6.02% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.81 per share and revenue of $242.45 billion. These totals would mark changes of +14.98% and +7.16%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for UNH. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 remained stagnant within the past month. UNH currently has a Zacks Rank of #3 (Hold).

In terms of valuation, UNH is currently trading at a Forward P/E ratio of 15.58. This valuation marks a premium compared to its industry's average Forward P/E of 15.57.

Meanwhile, UNH's PEG ratio is currently 1.23. 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. Medical - HMOs stocks are, on average, holding a PEG ratio of 1.09 based on yesterday's closing prices.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 88, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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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