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

Zacks Equity Research

In the latest trading session, UnitedHealth Group (UNH) closed at $290.47, marking a -0.53% move from the previous day. This change lagged the S&P 500's daily gain of 0.03%. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq added 0.1%.

Prior to today's trading, shares of the largest U.S. health insurer had gained 7% over the past month. This has outpaced the Medical sector's gain of 5.4% and the S&P 500's gain of 1.82% in that time.

Investors will be hoping for strength from UNH as it approaches its next earnings release. The company is expected to report EPS of $3.76, up 14.63% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $61.15 billion, up 4.68% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.97 per share and revenue of $242 billion. These totals would mark changes of +16.23% and +6.96%, respectively, from last year.

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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.17% higher. UNH currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, UNH is holding a Forward P/E ratio of 19.5. Its industry sports an average Forward P/E of 19.94, so we one might conclude that UNH is trading at a discount comparatively.

Investors should also note that UNH has a PEG ratio of 1.55 right now. 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 1.24 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% 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.

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


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