Dow Jones medical giant UnitedHealth Group is the IBD Stock Of The Day Wednesday. UNH stock is working toward a handle buy point while its relative strength line trends higher.
Minnetonka, Minn.-based UnitedHealth Group is one of the largest U.S. managed care providers. It offers a range of health care coverage and benefits services through its UnitedHealthcare and Optum divisions.
UnitedHealthcare covers Medicare and Medicaid beneficiaries and provides health care benefits to employers and individuals globally. The company has contracts with more than 1.6 million physicians and health professionals, as well as 8,000 hospitals across the U.S.
Optum provides health care and pharmacy services as well as tech solutions to patients, employers and providers. The Optum RX segment offers prescription delivery and medicine management via a mobile app. Optum Health provides a health care ecosystem to connect patients with doctors through Optum Care as well as savings accounts and payment and financing options through Optum Financial.
Earnings Growth
UnitedHealth beat Q3 forecasts on Oct. 13, reporting 13.3% adjusted earnings growth to $6.56 per share. That ended a three-quarter streak of slowing growth. Revenue jumped 14.2% to $92.36 billion.
Analysts polled by FactSet expected earnings of $6.33 per share on $91.4 billion in revenue.
UnitedHealth added 55,000 Medicare Advantage members during the quarter, while the number of people served under Medicaid fell by 290,000 to 8.065 million amid eligibility redeterminations. Domestic commercial customers rose by 75,000.
Meanwhile, Optum Health saw revenue jump 22% to $56.7 billion.
UNH lifted its full-year 2023 earnings guidance to a range of $24.85 to $25 per share, up from its previous estimates of $24.70 to $25. FactSet expects full-year earnings per share of $24.83.
UBS upgraded UNH stock to buy from neutral on Oct. 16. The report noted that the "strong" results were a "clearing event that should pave the way for improved valuation of the stock," according to reports from TheFly. UBS ratcheted up its price target on UNH stock to 640 from 520.
UnitedHealth is a member of the IBD Long-Term Leaders list and leads the Medical-Managed Care industry group ,according to the IBD Stock Checkup.
UNH Stock
UNH stock shows a 546.78 buy point for a cup-with-handle base. Shares have been testing short-term support, bouncing off their 21-day exponential moving average on Monday and testing their 10-day line Wednesday.
UNH stock has a 94 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. Shares have a 91 EPS Rating. UnitedHealth's relative strength line has been on the upswing since mid-September; it has an 81 RS Rating.
The market is in a correction, meaning it's not a good time to buy new stocks. IBD recommends limiting portfolio exposure right now t0 20% of capital at most. UNH stock is a good candidate to place on watchlists and wait for the market to execute a follow-through day.
UNH stock is essentially flat on the year but not too far below its all-time highs of 558.10 from November 2022.
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