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UnitedHealth Group Incorporated (UNH), headquartered in Minnetonka, Minnesota, owns and manages organized health systems. With a market cap of $557 billion, the company provides employers products and resources to plan and administer employee benefit programs serving customers worldwide.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and UNH definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the healthcare plans industry. The health insurance giant offers a variety of health care options, including health maintenance organizations, point of service plans, preferred provider organizations, and managed fee-for-service programs, to meet the diverse needs of customers.
Despite its notable strength, UNH slipped 3.2% from its 52-week high of $630.73, achieved on Nov. 11. Shares of UNH rose 1.1% over the past three months, trailing behind the Dow Jones Industrials Average’s ($DOWI)9.9% gains during the same time frame.
In the longer term, shares of UNH rose 16% on a YTD basis and climbed 11.4% over the past 52 weeks, underperforming DOWI’s YTD gains of 19.4% and 24.3% returns over the last year.
To confirm the bullish trend, UNH has traded above its 50-day moving average since early November, with slight fluctuations. The stock has been consistently trading above its 200-day moving average since mid-July.
UNH underperformed as medical costs rose, fueled by pandemic aftermath. Additionally, aggressive billing, cyberattack costs, and reduced Medicaid coverage added to pressures, leading to downward earnings revisions and investor concerns.
On Oct. 15, UNH shares closed down more than 8% after reporting its Q3 results. Its adjusted EPS of $7.15 beat Wall Street expectations of $7.02. The company’s revenue was $100.8 billion, topping Wall Street forecasts of $99.5 billion. UNH expects full-year adjusted EPS to be between $27.50 and $27.75.
UnitedHealth’s rival, Elevance Health, Inc. (ELV)shares lagged behind UNH. The stock plummeted 15.2% on a YTD basis and 17.2% over the past 52 weeks.
Wall Street analysts are bullish on UNH’s prospects. The stock has a consensus “Strong Buy” rating from the 24 analysts covering it, and the mean price target of $632.42 suggests a potential upside of 3.5% from current price levels.
