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UnitedHealth Group (UNH) Suffers a Larger Drop Than the General Market: Key Insights

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The latest trading session saw UnitedHealth Group (UNH - Free Report) ending at $502.42, denoting a -1.69% adjustment from its last day's close. This change lagged the S&P 500's daily loss of 0.43%. Meanwhile, the Dow lost 1.01%, and the Nasdaq, a tech-heavy index, lost 0.47%.

Heading into today, shares of the largest U.S. health insurer had lost 1.67% over the past month, lagging the Medical sector's gain of 4.6% and the S&P 500's gain of 2.6% in that time.

Market participants will be closely following the financial results of UnitedHealth Group in its upcoming release. It is anticipated that the company will report an EPS of $7.24, marking a 4.78% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $110.97 billion, up 11.2% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $29.54 per share and revenue of $451.19 billion, indicating changes of +6.8% and +12.72%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for UnitedHealth Group. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.7% fall in the Zacks Consensus EPS estimate. Right now, UnitedHealth Group possesses a Zacks Rank of #3 (Hold).

Looking at its valuation, UnitedHealth Group is holding a Forward P/E ratio of 17.3. This indicates a premium in contrast to its industry's Forward P/E of 16.09.

Also, we should mention that UNH has a PEG ratio of 1.4. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Medical - HMOs industry held an average PEG ratio of 1.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 203, putting it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow UNH in the coming trading sessions, be sure to utilize Zacks.com.


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