Healthcare firm UnitedHealth Group (UNH) has reported better-than-expected financial results for the second quarter ended June 30. Minnesota-based UnitedHealth offers insurance services and healthcare products.
The company reported its adjusted earnings per share (EPS) at $4.70, beating analysts’ expectations of $4.43. UnitedHealth had reported an adjusted EPS of $7.12 in the same quarter last year.
Revenues increased 14.8% year-over-year to $71.3 billion and surpassed the Street’s estimates of $69.45 billion. The rise was driven by double-digit percentage growth in both UnitedHealthcare and Optum business segments.
UnitedHealthcare’s revenue rose 13% year-over-year to $6.4 billion, and Optum’s revenue climbed 17.2% to $38.3 billion.
For full-year 2021, the company expects adjusted EPS to be between $18.30 and $18.80. (See UnitedHealth stock chart on TipRanks)
Last month, Bank of America Securities analyst Kevin Fischbeck reiterated a Buy rating on the stock and raised the price target from $450 to $522.
The analyst said, “We forecast that the company should be able to grow revenue at an 8.7% CAGR over the next five years simply by growing in-line with its end-markets, and given that the growth is higher in the higher-margin businesses, this should result in organic earnings growth of 9.5%.”
Overall, the stock has a Strong Buy consensus based on 16 Buys and 2 Holds. The average UnitedHealth price target of $452.60 implies 9.1% upside potential. The company’s shares have gained 36.4% over the past year.
According to TipRanks’ Smart Score rating system, UnitedHealth scores a 9 out of 10, suggesting that the stock is likely to outperform market averages.
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