Are Investors Too Cautious on UnitedHealth After Earnings?

Health and Healthcare

Published: October 14, 2020 9:55 am

When UnitedHealth Group Inc. (NYSE: UNH) released its third-quarter financial results before the markets opened on Wednesday, the firm posted $3.51 in earnings per share (EPS) and $65.1 billion in revenue. Analysts were calling for EPS of $3.09 on $63.96 billion in revenue. In the same period of last year, UnitedHealth said it had $3.88 in EPS and revenue of $60.35 billion.

During the latest quarter, the company saw continued growth, led Optum and the UnitedHealthcare public-sector and senior benefits businesses, despite the continued setbacks from COVID-19. Total revenues grew 8%, year over year, reflecting balanced, broad-based revenue growth across Optum and UnitedHealthcare.

UnitedHealthcare revenues increased 4.8% year over year to $50.4 billion. Third-quarter earnings from operations at UnitedHealthcare were $2.1 billion, down from $2.7 billion from the same period last year.

Optum third-quarter revenues and operating earnings of $34.9 billion and $2.6 billion, respectively, increased from $28.8 billion and $2.4 billion a year ago.

The company updated its outlook for the 2020 full year. UnitedHealth now expects to see EPS in the range of $16.50 to $16.75, an increase of a quarter on both ends. Consensus estimates call for $16.58 in EPS and $255.65 billion in revenue for the full year.

On the books, the company ended the quarter with $20.81 billion in cash and cash equivalents, up from $14.25 billion at the end of 2019.

UnitedHealth stock traded down over 2% to $323.54 early Wednesday, in a 52-week range of $187.72 to $333.70. The consensus price target is $352.32.

24/7 Wall St.
Wall Street Fund Managers Love These 5 Large Cap Health Care Stocks

Take Charge of Your Retirement In Just A Few Minutes (Sponsor)

Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.

Here’s how it works:

Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.

Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!