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UnitedHealth Group Inc. (UNH) stock slower has dropped over the past year, though the company significantly outperformed the S&P 500, rising by approximately 22% compared to the S&P’s loss of about 21% as of October 20, 2022. Hedge funds were selling, and the healthcare company landed on the WhaleWisdom HeatMap at a ranking of three.

UnitedHealth is a diversified healthcare and insurance company that offers healthcare products and insurance services. The company’s two core platforms include UnitedHealthcare, comprised of its health benefit plans and services, and OptumRx, a line of pharmacy care services and programs, including home delivery and clinical capabilities. UnitedHealth generates the bulk of its revenue from premiums on risk-based products, fees for services, the sale of healthcare products, and investments.

Rising expenses and temporary government mandates have impacted the healthcare industry throughout the Coronavirus pandemic. Health insurers’ medical costs and profits fluctuated from increased hospitalizations, restrictions on non-urgent and elective procedures, and inflation. However, United Health anticipates that these challenges and higher costs will ease in the coming year.

Hedge Funds Sell Shares

UnitedHealth saw hedge funds selling in the second quarter of 2022, with the aggregate 13F shares held lowered to approximately 143.5 million from 150.7 million, a change of roughly 4.8%. Of the hedge funds, 30 created new positions, 175 added their stakes, 48 exited, and 208 reduced their holdings. Institutions sold and decreased their aggregate holdings by a modest 0.2% to approximately 808.9 million from 810.8 million.

Favorable Revenue Estimates

Analysts expect to see earnings increasing through 2023, bringing earnings per share to $22.03 by December 2022 and $24.95 by December 2023. Estimates are also encouraging for revenue, with an anticipated rise by December 2022 to approximately $323.3 billion; this momentum may continue with revenue estimated at $352.1 billion by December 2023.

Analysts Respond to Strong Q3 Results

UnitedHealth exceeded Wall Street’s expectations in the third quarter, causing the company to raise its earnings outlook and many analysts to raise price targets. Deutsche Bank analyst George Hill kept a Buy rating on UnitedHealth’s shares and increased the firm’s price target to $615 from $569. RBC Capital Markets maintained an Outperform rating on the stock and raised its price target on UnitedHealth to $592 from $588. Raymond James lowered its price target on UnitedHealth to $615 while maintaining the company as a Strong Buy.

Optimistic Outlook

UnitedHealth’s performance over the past year demonstrates its ability to grow despite pandemic challenges and a volatile market. The healthcare industry has growth potential, and UnitedHealth’s products and services will likely see continued demand. Analysts’ encouraging earnings and revenue growth predictions through 2023 support UnitedHealth as a worthwhile investment opportunity.

This entry was posted on Monday, October 24th, 2022 at 7:53 am and is filed under Stock. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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