UnitedHealth Group, Inc. (UNH) has made steady gains over the past year, despite a challenging market. Though hedge funds were selling in the second quarter, the company continued to climb the WhaleWisdom Heatmap to a rank of three in the second quarter. UnitedHealth Group has significantly outperformed the S&P 500, rising by approximately 30% compared to the S&P’s loss of about 5% over the past year.

UnitedHealth is an American healthcare and insurance company with two segments: UnitedHealthcare and OptumRx. Its UnitedHealthcare segment offers employers consumer-oriented health benefit plans and services, while the OptumRx business line provides pharmacy services and programs. UnitedHealth is one of the nation’s largest health insurers, offering a variety of health benefit plans and programs with the mission of helping people live healthier lives and improving the health care system’s performance.

(WhaleWisdom)

Hedge Funds Sell Despite Growth

Hedge Funds adjusted their portfolios, and the aggregate 13F shares held decreased to approximately 143.0 million from 150.7 million, a reduction of about 5.1%. Overall, for hedge funds, 29 created new positions, 173 added, 46 exited, and 206 reduced their stakes. Institutions decreased their holdings by about 1.2% to 801.4 million from 810.9 million. The track record of 13F metrics between 2000 and 2022 suggests that UnitedHealth remains on an upward trend.

(WhaleWisdom)

Encouraging Multi-year Estimates

Analysts expect to see positive momentum for revenue, with increases in growth through 2023 that could bring revenue to approximately $349.3 billion by December 2023, up from an estimated $322.2 billion in 2022. Year-over-year estimated increases could also bring earnings to $24.89 per share by December 2023, up from a predicted $21.85 for December 2022. Year-over-year growth is estimated to bring revenue to approximately $38.2 billion by December 2023, up from an estimated $25.8 billion in December 2021.

(WhaleWisdom)

Analysts Raise Price Targets

Analysts are bullish on the stock following strong second-quarter results. Analyst Ann Hynes of Mizuho Securities Co., Ltd. raised the firm’s price target on UnitedHealth to $600 from $550 and kept a Buy rating on shares. Argus Research Co. analyst David Toung also maintained a Buy rating on the stock and raised the firm’s price target to $650 from $580. Kevin Caliendo of UBS Securities kept a Neutral rating on UnitedHealth’s shares and increased the firm’s price target to $570 from $545. Despite United Health management’s outlook, Caliendo’s milder price adjustment speaks to cautiousness given the uncertainty of the Coronavirus pandemic and its future impact on hospitalizations and medical costs. BMO Capital Markets analyst Matt Borsch raised the firm’s price target on UnitedHealth to $610 from $600 following positive Q2 results. Borsch maintained a Market Perform rating on the stock and appeared encouraged by the favorable medical cost trend and not concerned at this time with the potential for increased competition or regulatory scrutiny of managed care organizations.

Favorable Outlook

UnitedHealth has experienced healthy growth over the past year, and analysts’ earnings and revenue growth predictions are optimistic. The company’s health programs and pharmacy services will likely see continued demand, encouraging investors to view UnitedHealth as an investment opportunity.