UnitedHealth Group (UNH) closed at $239.62 in the latest trading session, marking a +1.17% move from the prior day. The stock lagged the S&P 500's daily gain of 3.43%. At the same time, the Dow added 3.29%, and the tech-heavy Nasdaq gained 4.26%.
Coming into today, shares of the largest U.S. health insurer had lost 14.45% in the past month. In that same time, the Medical sector lost 11.69%, while the S&P 500 lost 12.15%.
UNH will be looking to display strength as it nears its next earnings release, which is expected to be January 15, 2019. On that day, UNH is projected to report earnings of $3.22 per share, which would represent year-over-year growth of 24.32%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $57.94 billion, up 11.29% from the year-ago period.
It is also important to note the recent changes to analyst estimates for UNH. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. UNH is currently a Zacks Rank #2 (Buy).
Investors should also note UNH's current valuation metrics, including its Forward P/E ratio of 16.2. Its industry sports an average Forward P/E of 13.61, so we one might conclude that UNH is trading at a premium comparatively.
Also, we should mention that UNH has a PEG ratio of 1.2. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - HMOs industry currently had an average PEG ratio of 1.05 as of yesterday's close.
The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 63, putting it in the top 25% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.