UnitedHealth Group (NYSE: UNH) is scheduled to report its Q1 2021 outcomes on Thursday, April 15. We count on UnitedHealth
Our forecast signifies that UnitedHealth’s valuation is round $403 per share, which is roughly 7% above the present market value of round $375. Our interactive dashboard evaluation on UnitedHealth’s Pre-Earnings has further particulars.
(1) Revenues anticipated to be barely above the consensus estimates
Trefis estimates UnitedHealth’s Q1 2021 web revenues to be round $69.4 Bil, barely forward of the $69.3 Bil consensus estimate. A deferment in elective surgical procedures amid the unfold of Covid-19 impacted the general prescription quantity progress within the first half of 2020, however that development has reversed over the latest quarters, and prescription quantity is predicted to development greater going ahead.
Now that over one-third of the U.S. inhabitants have acquired a minimum of one dose of the Covid-19 vaccine, the general financial actions are more likely to transfer a step nearer to normalcy, boding nicely for UnitedHealth’s enterprise. The corporate’s Optum Well being section, which offers care by means of native medical teams, has been increasing its attain to 98 million individuals as of 2020 in comparison with 91 million in 2017. This has helped UnitedHealth’s prime line progress over the latest previous, and this development will seemingly proceed within the close to time period. UnitedHealth’s This autumn 2020 gross sales have been up 8% to $65.6 billion, led by positive factors in all segments. Our dashboard on UnitedHealth Group Revenues gives extra particulars on the corporate’s segments.
2) EPS additionally more likely to be forward of consensus estimates
UnitedHealth’s Q1 2021 adjusted earnings per share is predicted to be $4.42 per Trefis evaluation, simply 1% above the consensus estimate of $4.36. UnitedHealth’s adjusted web earnings of $2.4 billion in This autumn 2020 mirrored a 35% drop from its $3.7 billion determine within the prior-year quarter. This may be attributed to elevated working prices in the course of the pandemic. For the full-year 2021, we count on the adjusted EPS to be greater at $18.50 in comparison with $16.88 in 2020.
(3) Inventory value estimate greater than the present market value
UNH inventory although has underperformed the broader markets up to now in 2021 with the corporate’s share value rising simply 7%, in comparison with a 12% rise for S&P500. This could largely be attributed to investor considerations over elevated give attention to public well being plans by the brand new authorities, and its affect on UnitedHealth’s enterprise. Nevertheless, UnitedHealth has considerably diversified its income streams, with elevated give attention to Optum segments, and even on the insurance coverage aspect, it has added 3.5 million Medicare Benefit members over the past 5 years, and it goals so as to add shut to a different million going ahead. We don’t see any important affect on UnitedHealth’s enterprise within the close to time period. That stated, the general earnings progress within the close to time period will likely be impacted by greater medical prices, pushed by progress in quantity of elective surgical procedures and exams carried out, in addition to greater working prices.
Going by our UnitedHealth Group’s Valuation, with an EPS estimate of round $18.50 and a P/E a number of of round 22x in 2021, this interprets right into a value of $403, which is 7% above the present market value of round $375.
Be aware: P/E Multiples are based mostly on Share Value on the finish of the yr and reported (or anticipated) Earnings for the complete yr
Whereas UNH inventory might even see an increase within the close to time period, 2020 has created many pricing discontinuities which may supply engaging buying and selling alternatives. For instance, you’ll be shocked how counter-intuitive the inventory valuation is for Cerner vs. Humana.See all Trefis Price Estimates and Obtain Trefis Data right here