UnitedHealth Group today
United Health Group
- 52 week range
- $436.38
▼
$630.73
- Dividend yield
- 1.63%
- P/E ratio
- 33.48
- Target price
- $626.79
United Health Group New York Stock Exchange: UNG The share price is retreating from the highs set last year, providing investors with a good opportunity. Although earnings growth prospects have weakened, the company continues to grow, cost controls offset weakness, and returns on equity remain strong.
The stock price may falter in the first quarter of 2025, but long-term trends remain intact for this and other health care companies. The stock price of this large healthcare provider has been trending higher over the long term and is likely to reach new highs before the end of the year.
Mixed results highlight UnitedHealth’s performance
UnitedHealth reported a mixed quarter, with revenue missing consensus estimates for the first time in years. However, the slight 80 basis point deviation represents a significantly lower target, and the modest numbers expect the worst. The critical details are that revenue grew nearly 7% year-over-year, driven by strength across all segments and revenue streams driven by increased patient volume. UnitedHealth’s core business grew 4.6%, led by Optum’s 9.4% growth. Last year’s hack still affects Optum, but the damage was mostly to the rearview mirror and is quickly disappearing. In terms of revenue streams, the company reported growth in premiums, products and services, led by double-digit product growth.
UnitedHealth Group MarketRank™ Stock Analysis
- Overall MarketRank™
- 99th percentile
- Analyst rating
- Buy
- Pros/cons
- Growth potential 21.0%
- Short interest level
- Healthy
- Dividend Power
- Strong
- Environmental assessment
- -0.33
- Mood News
- 0.77
- Insider trading
- N/A
- Project Profit Growth
- 7.93%
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The news on profitability is also mixed, but positive for shareholders. Margins were squeezed by rising medical costs, but effective cost control backed by AI-powered insights made up for it. The end result was a 6% decline in operating income, reduced cash flow, and adjusted earnings of $6.81, which was still better than expected. Adjusted earnings per share beat by 100 basis points despite revenue weakness, and margins are expected to remain stable. The company confirmed that guidance is set for December 2024, which is lower than the analysis forecasts, but marks another year of growth and strong cash flow.
Cash flow and balance sheet show a neutral quarter of cash flow due to investments and return of capital. The takeaway is that the balance sheet remains healthy, with sufficient cash on hand and an unchanged cash position despite increases in accounts receivable and short-term and long-term assets. Responsibility also increases. However, this was not enough to offset the increase in assets, resulting in a 4% increase in net worth. Dividends and buybacks are significant: the dividend yield was over 1.55% in early January, and buybacks cut the diluted figure by nearly a full percentage point in 2024.
Analyst trends support UNH price action
Analyst trends are positive for market sentiment, including increased coverage and high confidence in the Buy rating. MarketBeat tracks 22 analysts with current ratings as of early 2025; 21 or 95% of them rate the stock as a “buy” and only one as a “hold”. Also notable is the trend in price target revisions, with consensus estimates up 8% over 12 months and new targets leading to a move to the upper end. Consensus suggests the stock will retest its highs later this year, 20% above critical support targets, while the cap will add 1,000 basis points.
UNH price performance is sketchy and suggests weakness may continue into the first quarter. The price action is also showing solid support at critical levels, indicating that the uptrend is still in place. These levels coincide with the 150-week moving average and support levels in 2023 and 2024. This is probably a strong level and is unlikely to be broken now. If so, this market could move lower to retest the bottom of its trading range around $445 before recovering. In this scenario, there is a risk that UNH stock will end up in a range with a ceiling around $555. The bottom of the range should be solid due to strong institutional interest and buying trends, but the ceiling could be just as strong. Institutional activity has been generally bullish in 2024, but shows selling when the stock price rises and support when it falls.
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