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UnitedHealth Group (UNH) Outpaces Stock Market Gains: What You Should Know

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UnitedHealth Group (UNH - Free Report) closed the most recent trading day at $400.44, moving +0.59% from the previous trading session. This change outpaced the S&P 500's 0.13% gain on the day.

Coming into today, shares of the largest U.S. health insurer had lost 2.12% in the past month. In that same time, the Medical sector gained 3.32%, while the S&P 500 gained 2.16%.

Investors will be hoping for strength from UNH as it approaches its next earnings release, which is expected to be July 15, 2021. The company is expected to report EPS of $4.40, down 38.2% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $69.55 billion, up 11.92% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $18.61 per share and revenue of $282.16 billion, which would represent changes of +10.25% and +9.73%, respectively, from the prior year.

Any recent changes to analyst estimates for UNH should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. UNH is currently a Zacks Rank #2 (Buy).

Digging into valuation, UNH currently has a Forward P/E ratio of 21.4. Its industry sports an average Forward P/E of 19.26, so we one might conclude that UNH is trading at a premium comparatively.

It is also worth noting that UNH currently has a PEG ratio of 1.62. 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 1.22 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 21, putting it in the top 9% 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.

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