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UnitedHealth Group (UNH) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3-min read

UnitedHealth Group (UNH) closed the most recent trading day at $464.73, moving +1% from the previous trading session. This move lagged the S&P 500's daily gain of 2.07%. Elsewhere, the Dow gained 1.4%, while the tech-heavy Nasdaq added 0.49%.

Coming into today, shares of the largest U.S. health insurer had lost 0.54% in the past month. In that same time, the Medical sector lost 5.81%, while the S&P 500 lost 2.08%.

UnitedHealth Group will be looking to display strength as it nears its next earnings release. In that report, analysts expect UnitedHealth Group to post earnings of $4.31 per share. This would mark year-over-year growth of 71.03%. Meanwhile, our latest consensus estimate is calling for revenue of $72.69 billion, up 11.03% from the prior-year quarter.

UNH's full-year Zacks Consensus Estimates are calling for earnings of $18.85 per share and revenue of $287.04 billion. These results would represent year-over-year changes of +11.67% and +11.63%, respectively.

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Any recent changes to analyst estimates for UnitedHealth Group should also be noted by investors. These revisions help to show the ever-changing nature of 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. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. UnitedHealth Group currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, UnitedHealth Group is holding a Forward P/E ratio of 24.41. This represents a premium compared to its industry's average Forward P/E of 21.06.

Meanwhile, UNH's PEG ratio is currently 1.66. 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. The Medical - HMOs was holding an average PEG ratio of 1.21 at yesterday's closing price.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 200, which puts it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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