Will UnitedHealth Lift the Dow Again When It Reports Wednesday?

Health and Healthcare

Published: January 14, 2020 12:10 pm

Last Updated: January 30, 2020 11:14 am

UnitedHealth Group Inc. (NYSE: UNH) is scheduled to report its most recent quarterly results before the opening bell on Wednesday. The consensus estimates call for $3.78 in earnings per share (EPS) and $61.04 billion in revenue. The fourth quarter of last year reportedly had $3.28 in EPS and $58.42 billion in revenue.

During the most recent quarter, total revenues grew $3.8 billion or 6.7% year over year, led by double-digit percentage revenue growth for Optum. Specifically, Optum revenues grew by 13.3% year over year to $28.8 billion, and earnings from operations advanced 16.1%.

As of the third quarter, UnitedHealthcare grew to serve 415,000 more people with medical benefits over the past year, driven by growth in commercial and Medicare Advantage membership, and with greater focus on serving people with higher acuity needs. This led to revenue growth of 4.7% to $48.1 billion in the quarter. Third-quarter 2019 earnings from operations at UnitedHealthcare grew by 3.8%, driven by revenue growth and strong cost disciplines.

The question for this quarter will be: How big of an impact will Optum have on the results? Even CEO, David Wichmann noted that “Optum and UnitedHealthcare are driving value for customers, creating momentum to finish the year strongly.”

UnitedHealth has underperformed the broad markets, with its stock up only 15% over the past 52 weeks. However, in the past quarter alone, the stock is up close to 29%.

Here’s what analysts were saying about UnitedHealth ahead of the report:

Credit Suisse has an Outperform rating with a $330 price target.
JPMorgan has an Overweight rating and a $361 price target.
Argus has a Buy rating with a $340 target price.
SunTrust Banks has a Buy rating with a $350 price target.
Wells Fargo rates it as Overweight with a $335 price target.
Evercore ISI’s Buy rating comes with a $320 target price.

Shares of UnitedHealth traded at $287.09 on Tuesday, in a 52-week range of $208.07 to $300.00. The consensus price target is $325.68.

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