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Here's Why UnitedHealth Group (UNH) Gained But Lagged the Market Today

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In the latest market close, UnitedHealth Group (UNH - Free Report) reached $496.22, with a +0.25% movement compared to the previous day. The stock lagged the S&P 500's daily gain of 0.27%. Meanwhile, the Dow experienced a drop of 0.31%, and the technology-dominated Nasdaq saw an increase of 0.88%.

Prior to today's trading, shares of the largest U.S. health insurer had lost 3.27% over the past month. This has lagged the Medical sector's gain of 2.89% and the S&P 500's gain of 2.85% in that time.

The upcoming earnings release of UnitedHealth Group will be of great interest to investors. In that report, analysts expect UnitedHealth Group to post earnings of $6.70 per share. This would mark year-over-year growth of 9.12%. Alongside, our most recent consensus estimate is anticipating revenue of $98.92 billion, indicating a 6.48% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $27.57 per share and a revenue of $398.24 billion, demonstrating changes of +9.75% and +7.16%, respectively, from the preceding year.

Investors should also note any recent changes to analyst estimates for UnitedHealth Group. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% lower. UnitedHealth Group is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that UnitedHealth Group has a Forward P/E ratio of 17.95 right now. This valuation marks a premium compared to its industry's average Forward P/E of 15.86.

It's also important to note that UNH currently trades at a PEG ratio of 1.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Medical - HMOs industry currently had an average PEG ratio of 1.24 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. Currently, this industry holds a Zacks Industry Rank of 69, positioning it in the top 28% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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