Why UnitedHealth Group (UNH) Outpaced the Stock Market Today

The most recent trading session ended with UnitedHealth Group (UNH) standing at $506.34, reflecting a +1.24% shift from the previouse trading day’s closing. The stock exceeded the S&P 500, which registered a gain of 0.73% for the day. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq added 0.98%.

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Coming into today, shares of the largest U.S. health insurer had lost 15.36% in the past month. In that same time, the Medical sector lost 3.8%, while the S&P 500 gained 0.34%.

Market participants will be closely following the financial results of UnitedHealth Group in its upcoming release. The company is forecasted to report an EPS of $6.74, showcasing a 9.42% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $101.88 billion, up 7.89% from the year-ago period.

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UNH’s full-year Zacks Consensus Estimates are calling for earnings of $27.61 per share and revenue of $401.88 billion. These results would represent year-over-year changes of +9.91% and +8.14%, respectively.

Investors should also take note of any recent adjustments to analyst estimates for UnitedHealth Group. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, UnitedHealth Group boasts a Zacks Rank of #3 (Hold).

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Investors should also note UnitedHealth Group’s current valuation metrics, including its Forward P/E ratio of 18.12. This represents a premium compared to its industry’s average Forward P/E of 12.58.

It is also worth noting that UNH currently has a PEG ratio of 1.47. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. The Medical – HMOs industry had an average PEG ratio of 0.93 as trading concluded yesterday.

The Medical – HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 186, putting it in the bottom 26% of all 250+ industries.

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