UnitedHealth reported strong Q2 results with earnings beating expectations, stock value appears appropriately valued.

From Nasdaq: 2024-07-21 11:06:28

UnitedHealth Group (UNH) reported Q2 results slightly below revenue expectations but with earnings surpassing forecasts. The company posted revenue of $98.6 billion and adjusted earnings of $6.80 per share, compared to estimates of $99 billion and $6.75, respectively. UNH stock has seen a 65% increase since early 2021, outperforming the S&P 500.

In the volatile market, UNH faced challenges in 2023 compared to the S&P 500, highlighting the difficulty individual stocks face in consistently beating the market. The Trefis High Quality Portfolio, however, outperformed the index every year. Looking ahead, UNH stock appears appropriately valued at $575, with earnings expected in the $27.50 to $28.00 range for 2024.

UNH’s Q2 revenue grew 6% y-o-y, driven by a 5% increase in UnitedHealthcare and a 12% rise in Optum sales. Adjusted operating margin remained stable at 8.7%, impacted by $0.92 per share from a cyber attack. The Medical Care Ratio rose to 85.1%, up 190 bps y-o-y. Despite challenges, UNH’s guidance stability bodes well for the stock.

Returns for UNH in July 2024 stand at 13% MTD and 9% YTD, totaling 258% since 2017. Comparatively, the S&P 500 returned 2% MTD, 17% YTD, and 150% in the same period. Investing with Trefis has shown steady gains, reinforcing the value of a diversified portfolio. UNH stock has risen 15% in the last five days, indicating full valuation.



Read more at Nasdaq: Should You Pick UnitedHealth Stock At $575 After A Q2 Beat?