Health and well-being company UnitedHealth Group Inc. (
) saw its coverage restarted on Wednesday as an "Outperform" at
The firm also set a valuation range of $40-43 on the stock,
which had closed at $30.89 on Tuesday.
Wells commented, "We believe the company has emerged from its
past troubles, but shares have not appreciated fully due to
concerns over health reform… At the most basic level, since health
reform will cause more people to be insured and since it will
increase the amount spent on health care it is likely that a
dominant plan like UnitedHealth will see growth from it. Having
said that, it will require skillful maneuvering and planning to
avoid myriad pitfalls… Finally, we believe UNH's strong balance
sheet will allow them to take advantage of weaker firms that cannot
adapt as well to the reformed health insurance system."
UnitedHealth shares fell 15 cents, or -0.5%, in premarket
The Bottom Line
We have avoided shares of UNH since our early June 2008 coverage
began, when the stock was trading at $33. The company has a .42%
dividend yield, based on last night's closing stock price of
$30.89. The stock has technical support in the $26 price area. If
the shares can firm up, we see overhead resistance around the
$32-$34 price levels. We would remain on the sidelines for now.
UnitedHealth Group Inc. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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