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UnitedHealth Group (UNH) Gains But Lags Market: What You Should Know

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UnitedHealth Group (UNH - Free Report) closed at $312.83 in the latest trading session, marking a +0.09% move from the prior day. This change lagged the S&P 500's 0.75% gain on the day. Meanwhile, the Dow gained 0.76%, and the Nasdaq, a tech-heavy index, added 1.4%.

Heading into today, shares of the largest U.S. health insurer had gained 2.94% over the past month, outpacing the Medical sector's gain of 2% and lagging the S&P 500's gain of 7% in that time.

Investors will be hoping for strength from UNH as it approaches its next earnings release. In that report, analysts expect UNH to post earnings of $2.98 per share. This would mark a year-over-year decline of 23.2%. Meanwhile, our latest consensus estimate is calling for revenue of $63.73 billion, up 5.61% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $16.58 per share and revenue of $255.06 billion. These totals would mark changes of +9.73% and +5.33%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for UNH. Recent revisions tend to reflect the latest 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 shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. UNH is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that UNH has a Forward P/E ratio of 18.85 right now. For comparison, its industry has an average Forward P/E of 15.68, which means UNH is trading at a premium to the group.

Investors should also note that UNH has a PEG ratio of 1.49 right now. 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. UNH's industry had an average PEG ratio of 1.49 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 35, which puts it in the top 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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