UnitedHealth Group (NYSE:UNH) shares jumped by over 6% in the early trading session today after the healthcare major posted better-than-anticipated first-quarter numbers. This was despite the overhang of the recent cyberattack on its subsidiary, Change Healthcare.
UNH’s Q1 Results
During the quarter, revenue increased by 8.6% year-over-year to $99.79 billion, surpassing expectations by $560 million. Similarly, EPS of $6.91 exceeded consensus by $0.30. This performance included an impact of $0.74 per share on UNH’s bottom line from the Change Healthcare cyberattack. So far, UNH has provided advance funding and interest-free loans totaling over $6 billion to support care providers impacted by the cyber incident.
For the full year, UNH expects an impact of $1.15 to $1.35 per share on its bottom line from the cyberattack. Furthermore, the company recorded a charge of $7 billion in Q1 related to the sale of its operations in Brazil. For Fiscal Year 2024, UNH foresees EPS in the range of $27.50 to $28.
UNH’s Resilient Performance
On the operations front, UNH’s first-quarter performance was marked by growth at its UnitedHealthcare and Optum units. Its medical care ratio during this period increased to 84.3% from 82.2% a year ago. This uptick was a result of reductions in Medicare funding and the impact of the Change Healthcare cyberattack. Concurrently, the company’s operating cost ratio improved to 14.1% from 14.8%, reflecting its focus on cost management.
Is UNH Stock a Buy, Sell, or a Hold?
Today’s price gains come after a nearly 15% drop in UNH’s share price so far this year. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average UNH price target of $591.29. However, analysts’ views on the company could see a revision following today’s earnings report.
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