UnitedHealth Group Inc. Faces Q4 Earnings Hurdles Amid Investor Interest UNH is set to announce its fourth quarter earnings, capturing the attention of investors. Stephanie Link, Chief Investment Officer at Hightower Advisors LLC, has labeled the managed care powerhouse as “the number one company on sale,” despite forecasts indicating potential earnings challenges in the short term.

Q4 Earnings Expectations: A Possible Miss?

Estimates put earnings per share (EPS) at $6.73, with revenue expected to hit approximately $101.75 billion, according to Benzinga Pro data. However, heightened utilization rates may impact profit margins negatively.

“They’re probably gonna miss…because utilization rates are so strong, so high, and it hurts their cost,” Link noted during CNBC’s Halftime Report. Despite this, she anticipates these challenges will be only temporary, rather than a long-lasting issue.

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Transitioning from Consistent Beats to Strategic Patience

Although UnitedHealth has historically excelled at exceeding earnings expectations, its stock has exhibited minimal movement over the last year. Nevertheless, Link remains optimistic. “They have a gem with Optum,” she stated, referencing the segment that accounts for 24% of the company’s revenue and 12% of operating profits.

The ongoing mergers and acquisitions (M&A) in the sector are enhancing Optum’s growth potential, even as the healthcare industry faces overall investor skepticism.

Chart created using Benzinga Pro

Technically, shares of UnitedHealth are demonstrating bullish buying interest, trading above its eight, 20, and 200-day simple moving averages (SMAs).

Currently priced at $543.74 per share, the stock shows bullish signals across those measures, though its moving average convergence/divergence (MACD) indicator reads a negative 6.15, suggesting some caution. Meanwhile, the relative strength index (RSI) stands at 56.86, indicating moderate strength with the potential for further upward movement.

An Emerging Buying Opportunity?

Traditionally trading at high valuations, UnitedHealth is now valued at 17 times earnings, down from its usual 21 times multiple. “When I owned it, it was trading at something like 25 times, and every quarter was a beat and raise,” Link remarked. She remains confident that the visibility of this stock will improve after the earnings release.

Link is bullish on UnitedHealth’s future, pointing to solid fundamentals, a robust $18 billion buyback program, and the expectation for double-digit growth in both earnings and revenue. “We’re gonna see double-digit growth in earnings and revenues,” she insisted, downplaying current regulatory and litigation challenges as mere “noise.”

For investors, the company’s elite status as the “number one managed care company” could present a unique buying opportunity amid the current market lull.

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