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With a market cap of $467.3 billion, Minnetonka, Minnesota-based UnitedHealth Group Incorporated (UNH) is a diversified healthcare company offering a wide range of health care products and services. Operating through its UnitedHealthcare and Optum segments, the company provides health benefits, care delivery, technology-enabled health services, and pharmacy care programs to a broad global market. The company is set to unveil its fiscal Q4 earnings results on Friday, Jan. 10.
Ahead of this event, analysts expect the largest U.S. health insurer to report a profit of $6.74 per share, up 9.4% from $6.16 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in the past four quarters. In the most recent quarter, the company exceeded the consensus EPS estimate by 1.9% margin.
For fiscal 2024, analysts expect UNH to report EPS of $27.61, up 9.9% from $25.12 in fiscal 2023. Looking forward to fiscal 2025, EPS is expected to grow nearly 8% year-over-year to $29.81.
UNH has underperformed the broader markets in 2024, with shares down 3.2%, compared to the S&P 500 Index's ($SPX) 24.2% gain and the Health Care Select Sector SPDR Fund's (XLV) 1.1% return on a YTD basis.
Despite reporting better-than-expected Q3 adjusted EPS of $7.15 and revenue of $100.8 billion, shares of UnitedHealth Group dropped 8.1% on Oct. 15 due to disappointing guidance revisions and increased costs. The company lowered its full-year adjusted EPS range to $27.50 - $27.75, signaling narrowing profit expectations. Additionally, higher-than-expected medical costs, reflected in an elevated medical care ratio (MCR) of 85.2%, raised investor concerns about cost pressures. The impact of a cyberattack and a decline in global commercial and Medicaid membership further exacerbated negative sentiment.
Analysts' consensus rating on UNH stock is bullish, with a "Strong Buy" rating overall. Out of 24 analysts covering the stock, opinions include 22 "Strong Buys” and two "Moderate Buys." This configuration is slightly more bullish than three months ago, with 21 analysts suggesting a "Strong Buy."
The average analyst price target for UNH is $641.08, suggesting a potential upside of 26.5% from current levels.
