UnitedHealth Group (UNH) Falls More Steeply Than Broader Market: What Investors Need to Know

Core Viewpoint - UnitedHealth Group is facing a significant year-over-year decline in earnings, while revenue is expected to grow, indicating mixed performance in the upcoming earnings report [2][3]. Group 1: Stock Performance - UnitedHealth Group (UNH) closed at $323.62, down 2.2% from the previous day, underperforming the S&P 500, which lost 0.35% [1]. - Over the past month, shares of UnitedHealth Group have appreciated by 2.07%, underperforming the Medical sector's gain of 5.67% but outperforming the S&P 500's gain of 1.2% [1]. Group 2: Earnings and Revenue Estimates - UnitedHealth Group is projected to report earnings of $2.07 per share, representing a year-over-year decline of 69.6% [2]. - The Zacks Consensus Estimate for revenue is projecting net sales of $113.53 billion, up 12.62% from the year-ago period [2]. - For the entire fiscal year, earnings are projected at $16.29 per share, a decline of 41.11%, while revenue is expected to be $447.97 billion, an increase of 11.91% from the prior year [3]. Group 3: Analyst Estimates and Rankings - Recent adjustments to analyst estimates for UnitedHealth Group indicate changing business trends, with positive changes suggesting a favorable outlook on business health and profitability [4]. - The Zacks Rank system, which includes estimate changes, currently ranks UnitedHealth Group at 3 (Hold) [6]. Group 4: Valuation Metrics - UnitedHealth Group has a Forward P/E ratio of 20.32, which is a premium compared to the industry average Forward P/E of 13.6 [7]. - The company has a PEG ratio of 2.16, compared to the Medical - HMOs industry average PEG ratio of 1.28 [8]. Group 5: Industry Context - The Medical - HMOs industry holds a Zacks Industry Rank of 202, placing it in the bottom 19% of all 250+ industries [8]. - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [9].