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UnitedHealth (UNH) to Post Q4 Earnings: What's in the Cards?

Zacks Equity Research

UnitedHealth Group Inc. UNH is set to release fourth-quarter and 2019 earnings on Jan 15, before market open.

The Zacks Consensus Estimate for the company’s earnings per share is pegged at $3.77, indicating an increase of 14.94% year over year. The consensus mark for revenues is pegged at $60.98 billion, indicating a rise of 4.38%.

Factors at Play

Revenues at the UnitedHealthcare segment are likely to have gained from higher enrollment and increase in pricing. The Zacks Consensus Estimate for this segment’s revenues is currently pegged at $48.7 billion, indicating growth of 5.1% from the year-ago quarter’s reported figure. Its business groups — Employer and Individual, Medicare and Retirement, and Global — are expected to have contributed to earnings. Also, revenue growth and cost control are likely to have aided the segment’s earnings.

Revenues at Optum segment are likely to have improved on strong contributions across each of its sub-segments, OptumHealth, OptumInsight and OptumRx. The Zacks Consensus Estimate for this segment’s revenues is currently pegged at $30.4 billion, suggesting growth of 10.5% from year-ago quarter’s reported figure.

The company is likely to have experienced an increase in total medical membership driven by growth in members served in the Commercial and Medicare Advantage, partially offset by lower Medicaid and International membership.

Share repurchases made by UnitedHealth in the to-be-reported quarter is likely to have benefited its bottom line.

2019 Guidance

The company expects 2019 adjusted EPS of $14.90-$15.

Earnings Surprise History

The company boasts an attractive earnings surprise history. It beat estimates in each of the last four quarters, the surprise being 3.41%, on average. This is depicted in the chart below:

UnitedHealth Group Incorporated Price and EPS Surprise

What Our Model Says

Our proven model predicts an earnings beat for UnitedHealth this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: UnitedHealth has an Earnings ESP of +0.43% as the Zacks Consensus Estimate is pegged at $3.77 per share and the Most Accurate Estimate stands at $3.79 per share.

Zacks Rank: UnitedHealth has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks That Warrant a Look

Here are some other companies in the healthcare sector that you may consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Humana Inc. HUM has an Earnings ESP of +0.15% and a Zacks Rank #2.

Centene Corp. CNC has an Earnings ESP of +0.91% and a Zacks Rank #3.

Medtronic PLC MDT has an Earnings ESP of +0.03% and a Zacks Rank #2.

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Click to get this free report Medtronic PLC (MDT) : Free Stock Analysis Report Humana Inc. (HUM) : Free Stock Analysis Report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Centene Corporation (CNC) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research