UnitedHealth Group rallied on Thursday for a third consecutive day, leading the Dow Jones Industrial Average, since topping first-quarter earnings early Tuesday. Meanwhile, TD Cowen wrote Thursday it expects managed care stocks to be propelled forward compared to publicly traded hospital stocks.
UNH stock advanced 3% to 493.58 in above-average-volume during Thursday's market action, reclaiming its 50-day moving average and leading the Dow. UnitedHealth stock is now up 12.3% on the week. It down 0.2% in April, after a two-week sell off following news that Medicare Advantage reimbursement rates for 2025 would not be increased from initial estimates established in January.
On Tuesday, UnitedHealth reported better-than-expected earnings and revenue with EPS rising 10.4% to $6.91 while sales grew 8.6% to $99.796 billion. UNH shares jumped more than 5% Tuesday even though the results exclude the bulk of costs the company incurred to shore up operations and support affected medical care providers after February's cyberattack on its Change Healthcare unit.
UNH said it expects a full-year impact from the cyberattack of $1.15 to $1.35 per share. Still, the company affirmed its adjusted EPS outlook of $27.50 to $28. That compared to the FactSet analyst consensus of $27.50.
UnitedHealth Stock Receives Price-Target Increases
On Thursday, TD Cowen analyst Gary Taylor reported that the firm's survey of 305 hospitals found 1% year-over-year March revenue growth. That is "far weaker" than the 11% growth reported in the firm's February review.
Taylor wrote that based on that the survey "represents a resounding first test of our 2H24 trend-moderation thesis." The firm expects the slowing trend to propel managed care stocks, including UNH, performance compared to hospitals in coming months.
Meanwhile on Wednesday, Piper Sandler raised its price target on UnitedHealth stock to 571, from 566, and maintained an overweight rating on the shares.
Barclays also on Wednesday hiked its price target on UNH to 560 up from its previous 534 target.
UNH stock has a 62 Composite Rating out of a best-possible 99. UnitedHealth stock also has a 26 Relative Strength Rating and a 91 EPS Rating.
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