Shares of healthcare company UnitedHealth (UNH) are flat in today’s trading as investors await its Q4 earnings results on January 16 before the market opens. Analysts are expecting earnings per share to come in at $6.73 on revenue of $101.60 billion. This equates to 9.25% and 8.95% year-over-year increases, respectively, according to TipRanks’ data.
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This is ideal because earnings per share should grow faster than revenue, as this demonstrates a high degree of operating and financial leverage in the business. It’s also worth noting that UNH has beaten earnings estimates every quarter since its 2020 Q3. And it is likely that this streak will continue. Indeed, Piper Sandler called UnitedHealth a top pick in the managed care sector due to its strong position in the Medicare Advantage (MA) market.
The firm expects UnitedHealth to benefit from the proposed 4.3% average increase in MA payment rates for 2026 that was announced by the U.S. Centers for Medicare & Medicaid Services. Analyst Jessica Tassan projects that UnitedHealth will maintain its double-digit adjusted EPS growth thanks to its robust performance and efficiency gains. In addition, the analyst noted that UnitedHealth’s diversified operations enable it to withstand market challenges while generating strong earnings. Tassan maintains a $600 price target, reinforcing her bullish outlook on the stock.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a large 4.51% move in either direction.
What Is the Future of UNH Stock?
Overall, analysts have a Strong Buy consensus rating on UNH stock based on 19 Buys assigned in the past three months. After a 6% rally in its share price over the past year, the average UNH price target of $646.47 per share implies 18.9% upside potential.
