UnitedHealth Earnings Beat Estimates Sending Shares Higher

Meanwhile revenue of $64.42B (+6.8% year-over-year) surpassed estimates by $170 million. Shares are now trading up 2% in pre-market trading.

According to the company, “These results reflect minimal impact from the progression of the COVID-19 virus across the U.S. given various factors that only emerged late in the quarter, including: rising U.S. incidence and response initiatives; multiple investment initiatives including coverage expansions and increased access to critical care and pharmacy services; other funding and support initiatives; and lower elective care demand.”

Looking ahead UNH is maintaining its full year earnings per share outlook for 2020, including net earnings of $15.45 to $15.75 per share and adjusted net earnings of $16.25 to $16.55 per share.

“UNH remains among the best performing names in healthcare from a fundamental perspective, and we believe the company is well positioned to weather the COVID-19 outbreak and resulting economic downdraft, and should remain a core holding for healthcare investors” says RBC Capital’s Frank Morgan.

He has a buy rating on the stock and $332 price target (23% upside potential). Most analysts share Morgan’s bullish outlook on UNH.

The stock has a Moderate Buy consensus according to TipRanks, with a $313 average analyst price target (16% upside potential). With a 9% gain in the last five days, shares are currently 8% down on a year-to-date basis. (See UNH’s stock analysis on TipRanks)

At the same time the company announced that Andrew Witty, President, of the UnitedHealth Group and CEO of Optum, will temporarily leave his positions to help lead the World Health Organization’s new initiative for Covid-19 vaccine development.

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