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

Zacks Equity Research

UnitedHealth Group (UNH) closed the most recent trading day at $242.64, moving -0.56% from the previous trading session. This change lagged the S&P 500's 0.77% gain on the day. At the same time, the Dow added 0.44%, and the tech-heavy Nasdaq gained 1.06%.

Heading into today, shares of the largest U.S. health insurer had gained 0.21% over the past month, lagging the Medical sector's gain of 5.02% and the S&P 500's gain of 5.12% in that time.

Wall Street will be looking for positivity from UNH as it approaches its next earnings report date. This is expected to be July 18, 2019. On that day, UNH is projected to report earnings of $3.47 per share, which would represent year-over-year growth of 10.51%. Meanwhile, our latest consensus estimate is calling for revenue of $60.67 billion, up 8.17% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $14.71 per share and revenue of $244.06 billion, which would represent changes of +14.21% and +7.87%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for UNH. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. 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. Within the past 30 days, our consensus EPS projection remained stagnant. UNH is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, UNH is holding a Forward P/E ratio of 16.59. This represents a premium compared to its industry's average Forward P/E of 14.97.

We can also see that UNH currently has a PEG ratio of 1.31. 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. Medical - HMOs stocks are, on average, holding a PEG ratio of 1.05 based on yesterday's closing prices.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 17, putting it in the top 7% 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.

To follow UNH in the coming trading sessions, be sure to utilize Zacks.com.


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