UnitedHealth Group (NYSE: UNH) reported stronger-than-expected Q1 2022 results, topping both earnings and revenue estimates driven by robust performance across both Optum and UnitedHealthcare segments.
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Further, the company raised its FY 2022 guidance above the analyst expectations driven by robust results and strong outlook.
Despite the Q1 beat and raised guidance, shares of the healthcare company remained flat on April 14 to close at $534.82. Markedly, shares have gained 37% over the past year.
UnitedHealth is a diversified healthcare company, offering healthcare coverage and benefits services through UnitedHealthcare, and information and technology-enabled health services through Optum.
Q1 Outperformance
Adjusted earnings of $5.49 per share beat analysts’ expectations of $5.37 per share. The company reported earnings of $5.39 per share in the prior-year period.
Furthermore, revenues jumped 14% year-over-year to $80.1 billion and exceeded consensus estimates of $78.76 billion. The increase in revenues reflected double-digit growth at both Optum (18.9%) and UnitedHealthcare (13.6%).
Raised Guidance
The company now forecasts adjusted earnings in the range of $21.20 to $21.70 per share, while the consensus estimate is pegged at $21.60 per share.
CEO Comments
UnitedHealth Group CEO Andrew Witty commented, “Disciplined execution of our long-term strategy, with a sharp focus on ensuring access to care for the people we serve, enabled us to deliver high-quality, diversified growth across Optum and UnitedHealthcare during this first quarter of 2022.”
Wall Street’s Take
Following the upbeat results, CFRA increased its price target on UnitedHealth Group to $665 (24.3% upside potential) from $575 and reiterated a Buy rating.
Turning to Wall Street, the analyst consensus is also optimistic about UnitedHealth Group, with a Strong Buy rating based on 12 Buys and three Holds. The average UnitedHealth price target of $546.41 indicates an upside potential of 2.2%.
Investors Weigh In
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on UnitedHealth, with 5.1% of investors increasing their exposure to UNH stock over the past 30 days.
Conclusion
Strong Q1 results combined with raised full-year outlook bodes well for the stock, and reassures the investors that the growth story is here to stay.
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