UnitedHealth Group Prepares for Earnings Release Amid Market Challenges
Anticipated Q4 Profits and Future Growth Expectations
With a market cap of $467.3 billion, UnitedHealth Group Incorporated (UNH), based in Minnetonka, Minnesota, is a leading player in the healthcare sector. The company, which operates through its UnitedHealthcare and Optum segments, delivers a wide array of health products and services. This includes health benefits, care delivery, technology-driven health services, and pharmacy care programs for a vast global audience. UnitedHealth is scheduled to release its fiscal Q4 earnings results on Friday, Jan. 10.
Positive Earnings Forecasts Despite Recent Underperformance
Analysts expect UnitedHealth to report a profit of $6.74 per share, marking a 9.4% increase from $6.16 per share in the same quarter last year. The company has consistently outperformed Wall Street’s expectations over the last four quarters, exceeding the consensus EPS estimate by 1.9% in the most recent quarter.
Looking ahead to fiscal 2024, analysts project UNH will achieve an EPS of $27.61, an increase of 9.9% from $25.12 in fiscal 2023. Further, EPS is expected to grow nearly 8% to $29.81 in fiscal 2025.
In 2024, UNH has struggled, with shares down 3.2%. This decline contrasts sharply with the S&P 500 Index’s ($SPX) 24.2% gain and the Health Care Select Sector SPDR Fund’s (XLV) 1.1% return year-to-date.
Despite reporting a better-than-expected Q3 adjusted EPS of $7.15 and revenue of $100.8 billion, the stock fell 8.1% on Oct. 15. This drop was due to revisions in earnings guidance and rising costs. The company’s adjusted EPS forecast was lowered to a range of $27.50 – $27.75, indicating modest profit expectations. Increased medical costs, shown in a medical care ratio (MCR) of 85.2%, have raised investor concerns, alongside the effects of a cyberattack and a decline in global commercial and Medicaid membership.
Analyst Sentiment Remains Optimistic
Overall, analysts maintain a bullish outlook on UNH stock. The consensus rating is a “Strong Buy,” with 22 of the 24 analysts giving “Strong Buy” ratings and two opting for “Moderate Buy.” This is a slight improvement compared to three months ago when 21 analysts recommended a “Strong Buy.”
The average analyst price target for UNH stands at $641.08, indicating a potential upside of 26.5% from the current share price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
