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UnitedHealth Group Inc (NYSE: UNH) is up roughly 8.0% on Friday after the managed healthcare company reported a strong second quarter.
UnitedHealth shares up on raised outlook
Investors are rewarding the stock as UNH raised its full-year guidance as well.
The insurance giant now forecasts its adjusted earnings to fall between $24.70 a share and $25 a share. In a recent note to clients, Piper Sandler analyst Jessica Tassan said:
UNH has innovated its way to market leadership for decades. We believe breadth and scale gives it advantages in terms of risk selection, consumer influence, supply chain efficiency, network rates, and distribution.
The upbeat outlook was particularly welcomed considering UnitedHealth had recently warned of rising costs related to seniors opting for elective surgeries they previously delayed due to the pandemic as Invezz reported here.
UnitedHealth Q2 financial highlights
- Net income printed at $5.47 billion versus the year-ago $5.07 billion
- Per-share earnings also climbed significantly from $5.34 to $5.82
- Adjusted EPS came in at $6.14 as per the earnings press release
- Revenue went up 15.7% on a year-over-year basis to $92.9 billion
- FactSet consensus was $5.99 a share on $90.75 billion in revenue
Net margin declined 40 basis points versus last year to 5.9%. Still, Piper Sandler’s Tassan sees upside in UNH shares to $580 – about a 20% increase from here.
The future resides in Optum. Over the next decade, we believe Optum Health, Optum Insight and Optum Rx will increasingly serve as the front door to UNH.
What else was noteworthy?
Other notable figures in the earnings report include medical-loss ratio that increased 170 basis points to 83.2%. The healthcare stock is still down 8.0% versus its year-to-date high.
UnitedHealth also revealed a very significant increase in the demand for behavioural health services today. According to the Piper Sandler analyst:
UNH is a behemoth in healthcare contributing 7.7% of U.S. healthcare spending today from their UnitedHealth and Optum segments.
The post UnitedHealth shares jump 8.0% on strong Q2: analyst still sees significant room to the upside appeared first on Invezz.
