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Why UnitedHealth Group (UNH) Outpaced the Stock Market Today

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UnitedHealth Group (UNH - Free Report) closed the most recent trading day at $524.90, moving +0.4% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.04%. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, lost 0.03%.

The largest U.S. health insurer's shares have seen a decrease of 2.28% over the last month, not keeping up with the Medical sector's gain of 5.57% and the S&P 500's gain of 5.28%.

The upcoming earnings release of UnitedHealth Group will be of great interest to investors. The company's earnings report is expected on January 12, 2024. The company is predicted to post an EPS of $5.98, indicating a 11.99% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $91.97 billion, up 11.09% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $24.95 per share and a revenue of $368.9 billion, demonstrating changes of +12.44% and +13.8%, respectively, from the preceding year.

Any recent changes to analyst estimates for UnitedHealth Group should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. UnitedHealth Group is currently sporting a Zacks Rank of #3 (Hold).

From a valuation perspective, UnitedHealth Group is currently exchanging hands at a Forward P/E ratio of 20.96. Its industry sports an average Forward P/E of 15.96, so one might conclude that UnitedHealth Group is trading at a premium comparatively.

One should further note that UNH currently holds a PEG ratio of 1.59. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Medical - HMOs stocks are, on average, holding a PEG ratio of 1.13 based on yesterday's closing prices.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 87, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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