Will UnitedHealth Stock Trend Higher Post Q3?

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UnitedHealth Group (NYSE: UNH) It is scheduled to report its Q3 results on Friday, October 14. We expect UnitedHealth to post revenue and earnings slightly above road expectations. The company is likely to benefit from increased contribution from the Optum Health business, while its private health insurance and pharmacy management businesses should see steady growth. Not only do we expect the Company to navigate the latest quarter well, our forecast indicates that there is more room for growth in UNH stock, as discussed below. Our interactive dashboard analysis UnitedHealth’s Earnings Preview There is additional detail.

(1) Revenue is expected to be slightly above consensus estimates

  • Trefis estimates UnitedHealth’s third quarter 2022 net revenue to be approximately $80.6 billion, representing an annual increase of 11.5% and slightly higher than the consensus estimate of $80.5 billion.
  • The pharmacy management and health insurance businesses are expected to see steady sales growth.
  • Optum Health, which provides care through local medical groups, has seen substantial growth in recent quarters, a trend that is expected to continue in the near term.
  • For perspective, Optum Health’s revenue grew 36% annually to $54.1 billion in 2021, while overall gross revenue growth for the company was only 12%. In the first half of 2022, Optum Health’s sales grew 33% to $34.3 billion.
  • The strong growth in the Optum Health business can be attributed to an increase in the number of patients served under the company’s value-based arrangements, which also include home services.
  • earlier this week. UnitedHealth has closed its $13 billion acquisition of health-tech company Change Healthcare. This will help the company improve technology, including streamlining its administrative and payment processes.
  • Our Dashboard is on UnitedHealth Group Revenue There is more detail.
  • Looking to Q2 2022, UnitedHealth reported 12.6% growth in total revenue, led by double digits for both the UnitedHealth and Optum segments.

(2) EPS is likely to be above consensus estimates

  • UnitedHealth’s Q3 2022 adjusted earnings per share is expected to be $5.44 per Trefis analysis, slightly above the consensus estimate of $5.42.
  • UnitedHealth’s adjusted net income for the second quarter of 2022 was $5.3 billion, reflecting a 17.7% increase from its $4.5 billion figure in the prior-year quarter, led by 12.6% sales growth and 50 bps in operating margin. due to growth. Our Dashboard is on UnitedHealth’s Operating Income There is more detail.
  • For the full year 2022, we expect adjusted EPS of $21.90 compared to EPS of $19.02 in 2021.

(3) There is more room for growth in the UNH stock

  • we guess UnitedHealth Group’s Evaluation About $610 per share, representing an 18% increase from the current market price of $519.
  • At its current levels, UNH stock is trading below 24 times expected earnings of $21.90. This compares to 20x the average seen over the past three years. However, we believe that UNH deserves a higher multiplier, given the double-digit earnings growth in recent years, a trend that is expected to continue in the near term.

While UNH stock looks like it has more room for growth, it’s helpful to see how UnitedHealth Group Peers Fare on metrics that matter. You’ll find other valuable comparisons for companies across industries here. peer comparison,

In addition, the COVID-19 crisis has created several pricing discontinuities that can provide lucrative trading opportunities. For example, you’d be surprised how intuitive it is to approach stock valuations. Strikers vs UnitedHealth Group

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