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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 $280.67, marking a -0.26% move from the previous day. This change lagged the S&P 500's daily gain of 0.42%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.66%.

Coming into today, shares of the largest U.S. health insurer had gained 11.54% in the past month. In that same time, the Medical sector gained 8.13%, while the S&P 500 gained 4.09%.

UNH will be looking to display strength as it nears its next earnings release. On that day, UNH is projected to report earnings of $3.75 per share, which would represent year-over-year growth of 14.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $61.36 billion, up 5.05% from the year-ago period.

UNH's full-year Zacks Consensus Estimates are calling for earnings of $14.96 per share and revenue of $242.23 billion. These results would represent year-over-year changes of +16.15% and +7.07%, respectively.

Investors might also notice recent changes to analyst estimates for UNH. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. UNH currently has a Zacks Rank of #3 (Hold).

In terms of valuation, UNH is currently trading at a Forward P/E ratio of 18.81. This valuation marks a discount compared to its industry's average Forward P/E of 19.03.

Also, we should mention that UNH has a PEG ratio of 1.49. 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. UNH's industry had an average PEG ratio of 1.23 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 33, which puts it in the top 13% 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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