UnitedHealth (UNH, Financial) saw its share price rise modestly by $1.38, or 0.45%, reaching approximately $310.25. The day's options activity was relatively light, with 30,000 contracts traded, and a put/call ratio of 0.39, indicating a preference for calls over puts, compared to the usual 0.67 level.
The implied volatility (IV30) for UNH decreased by 0.85 to around 33.5, which remains higher than the median of the past year. This suggests an anticipated daily price fluctuation of about $6.55. Additionally, the put-call skew has leveled off, implying a modestly bullish outlook for the stock, despite a recent downgrade to Neutral by Baird.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 24 analysts, the average target price for UnitedHealth Group Inc (UNH, Financial) is $380.92 with a high estimate of $677.00 and a low estimate of $270.00. The average target implies an upside of 22.79% from the current price of $310.22. More detailed estimate data can be found on the UnitedHealth Group Inc (UNH) Forecast page.
Based on the consensus recommendation from 28 brokerage firms, UnitedHealth Group Inc's (UNH, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for UnitedHealth Group Inc (UNH, Financial) in one year is $703.71, suggesting a upside of 126.84% from the current price of $310.22. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the UnitedHealth Group Inc (UNH) Summary page.
UNH Key Business Developments
Release Date: April 17, 2025
- Adjusted Earnings Per Share Outlook: Revised to $26 to $26.50 for the year.
- Consolidated Revenue Outlook: Affirmed at $450 billion to $455 billion.
- Medical Care Ratio: Expected to be 87.5% plus or minus 50 basis points.
- Optum Health Revenue Outlook: $106 billion to $107 billion.
- Optum Health Operating Earnings: $6.2 billion to $6.4 billion.
- UnitedHealthcare Operating Earnings Outlook: $16 billion to $16.5 billion.
- Medicare Advantage Membership Growth: On pace to serve an additional 800,000 people this year.
- Optum Health Value-Based Care Patients: On track to add 650,000 net new patients.
- Optum Rx Revenue Growth: 14% increase, exceeding $35 billion for the quarter.
- Optum Rx Script Growth: 3% increase due to customer retention and new wins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- UnitedHealth Group Inc (UNH, Financial) is experiencing strong growth across its businesses, with plans to serve an additional 800,000 people in Medicare Advantage this year.
- Optum Health is on track to add 650,000 net new patients to value-based care arrangements, indicating robust expansion in this segment.
- Optum Rx is experiencing a strong selling season with new wins and high retention of long-term customers, highlighting its role in reducing drug prices for consumers.
- The company has introduced several initiatives to improve consumer experience, including AI-driven call routing and the removal of prior authorizations on certain drugs.
- UnitedHealth Group Inc (UNH) is seeing increased digital engagement among senior members, leading to higher wellness visits and better health management.
Negative Points
- UnitedHealth Group Inc (UNH) revised its adjusted earnings per share outlook for the year to $26 to $26.50, reflecting performance challenges.
- The company is facing increased care activity in its Medicare Advantage business, with utilization trends doubling compared to expectations.
- Unanticipated changes in Optum Medicare membership profiles are impacting 2025 revenue, with reimbursement levels below expectations.
- The transition to the new CMS risk model is proving more complex than anticipated, affecting operational execution.
- UnitedHealth Group Inc (UNH) is dealing with the effects of Medicare funding cuts, which have led to higher premiums and altered member behavior.
