U.S. Markets close in 1 hr 17 mins

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

Zacks Equity Research

UnitedHealth Group (UNH) closed at $295.09 in the latest trading session, marking a +0.85% move from the prior day. This change outpaced the S&P 500's 0.09% gain on the day. At the same time, the Dow added 0.34%, and the tech-heavy Nasdaq gained 0.23%.

Heading into today, shares of the largest U.S. health insurer had gained 5.8% over the past month, lagging the Medical sector's gain of 6.06% and outpacing the S&P 500's gain of 3.81% in that time.

Investors will be hoping for strength from UNH as it approaches its next earnings release, which is expected to be January 15, 2020. The company is expected to report EPS of $3.77, up 14.94% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $61.15 billion, up 4.68% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $14.98 per share and revenue of $242.40 billion, which would represent changes of +16.3% and +7.14%, respectively, from the prior year.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.18% higher within the past month. UNH currently has a Zacks Rank of #3 (Hold).

Investors should also note UNH's current valuation metrics, including its Forward P/E ratio of 19.53. For comparison, its industry has an average Forward P/E of 19.87, which means UNH is trading at a discount to the group.

Meanwhile, UNH's PEG ratio is currently 1.55. 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 1.23 based on yesterday's closing prices.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 53, which puts it in the top 21% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

Click to get this free report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research