UnitedHealth Group is set to release its Q2 2024 results, with expected revenues of $99 billion and earnings of $6.75 per share, slightly above street expectations. The company is likely to benefit from its Optum Health business and increased health insurance memberships. However, medical costs are expected to rise year-over-year. Despite this, there is still potential for the stock to grow from its current levels of under $510.
Looking at UNH stock performance in recent years, there have been fluctuations in returns, with underperformance in 2023 compared to the S&P 500. As the macroeconomic environment remains uncertain with high oil prices and elevated interest rates, the question arises whether UNH will see a strong jump in performance or underperform in the next 12 months. From a valuation perspective, UNH stock is expected to reach $586 per share, reflecting over 15% upside from its current levels.
In the previous quarter, UnitedHealth Group saw revenue growth driven by both the UnitedHealthcare and Optum segments. While operating margins declined due to factors such as business disruption impact at Change Healthcare, the company still saw a rise in bottom line earnings. Moving forward to the latest quarter, UnitedHealth is expected to continue benefiting from increased customers served, although rising medical costs remain a concern.
Despite facing near-term headwinds from rising medical costs, UnitedHealth Group’s stock performance has still outperformed the broader S&P 500 index year-to-date. There is optimism for the stock to see higher levels based on its valuation and potential growth opportunities. Comparisons with peers in the industry also show promise for UnitedHealth Group’s performance in the market.
Overall, the outlook for UnitedHealth Group in Q2 2024 appears positive, with expectations of revenue growth and adjusted earnings above street estimates. The company’s focus on its Optum Health business and increased health insurance memberships are likely to drive results, despite challenges related to rising medical costs. With potential for stock growth and positive peer comparisons, investors may find UnitedHealth Group to be a promising investment opportunity.
