UnitedHealth Group Inc. is one of the largest and most prominent players in the US healthcare industry. It operates across various facets of healthcare, including insurance, healthcare delivery, data analytics, and pharmacy benefit management, with the goal of improving healthcare access and outcomes for individuals and organisations.
Long term, the group's strong healthcare enrolment numbers, as well as its focus on value-based care, are expected to be key drivers in its pursuit of long-term earnings growth between 13% and 16%. The group is expected to hold its market-share lead in several divisions, with cost efficiencies remaining supportive of the group's services and offerings.
Technically, the price appears to be stable with less volatility and fewer abrupt price swings (see the insert), which makes the stock attractive as an investing option. Stability in the price can make a stock more attractive to conservative or risk-averse investors.
The stock is trading above its 200-day simple moving average (SMA) of $488 and key support levels (see the black trendline on the main chart). A series of green Heikin-Ashi candles also supports the bullish direction.
The start of upside momentum, according to the MACD indicator, and the upwards trajectory of the On-Balance Volume (OBV) indicator, offers further support.
Share Information
| Share code | UNH |
|---|---|
| Industry | Health Care Equipment & Service |
| Market Capital (USD) | 468.2 billion |
| One year total return | 0.89% |
| Return year-to-date | -3.56% |
| Current price (USD) | 505.45 |
| 52 week high (USD) | 558.10 |
| 52 week low (USD) | 445.68 |
| Financial year end | December |
| Closing paragraph | While the stock price has been relatively range bound since earlier this year, several technical indicators suggest that the price will break to the upside. |
Consensus expectations
(Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 22.19 | 24.84 | 27.87 | 31.50 |
| Growth (%) | 11.96 | 12.19 | 13.01 | |
| Dividend Per Share (USD) | 6.40 | 7.05 | 7.77 | 8.55 |
| Growth (%) | 10.19 | 10.20 | 10.00 | |
| Forward PE (times) | 20.34 | 18.13 | 16.05 | |
| Forward Dividend Yield (%) | 1.40 | 1.54 | 1.69 | |
| Closing paragraph | Attractive earnings growth is expected in the short-to-medium term. | |||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position |
CNC - BUY (Continue to hold) |
BTAL - BUY (Continue to hold) |
GS - Stop-loss (Close the position) |
|---|---|---|---|
| Entry | 66.44 | 19.20 | 344.57 |
| Current | 69.99 | 20.16 | 327.89 |
| Movement | 5.3% | 5% | -4.8% |
| Summary text |
The stock remains above key support levels and is trading just above its 200-day simple moving average. Upside momentum remains supportive.
Our profit target is $76 with a trailing stop-loss of $66.30. Exit the position on 30 November 2023. |
A falling wedge pattern remains of interest. The stock is trading above its 200-day simple moving average, with upside momentum supportive of the trade idea.
Our profit target is $21 with a stop-loss of $19.50. Exit the position on 13 December 2023. |
The stock breached our stop-loss level, leading us to close the position. |
| Share Name and position |
KO - Stop-loss (Close the position) |
FTNT - Stop-loss (Close the position) |
FOXF - Stop-loss (Close the position) |
|---|---|---|---|
| Entry | 61.64 | 63.5 | 105.69 |
| Current | 56.53 | 58.24 | 96.58 |
| Movement | -8.3% | -8.3% | -8.6% |
| Summary text | The stock breached our stop-loss level, leading us to close the position. | The stock breached our stop-loss level, leading us to close the position. | The stock breached our stop-loss level, leading us to close the position. |
