On Thursday, Piper Sandler adjusted its outlook on UnitedHealth Group (NYSE:NYSE:UNH), reducing the share price target to $566 from $581, while retaining an Overweight rating on the stock.
The adjustment follows an analysis of the impact from the Change Healthcare (NASDAQ:CHNG) situation, leading to an increased estimate for the first quarter 2024 medical loss ratio (MLR) to 84.5%.
The firm notes that UnitedHealth is set to report its earnings on April 16, and it is required to comply with mandatory disclosures under the Health Breach Notification Rule by April 21.
The new price target is also based on a forward-looking assessment, as the firm has moved its valuation basis from the previously estimated 2024 earnings to the expected 2025 earnings. This forward roll and the consideration of potential deceleration in EPS growth have influenced the revised price target for UnitedHealth.
The forthcoming earnings report and mandatory disclosures are significant upcoming events for UnitedHealth. These disclosures are expected to provide investors with important information that could impact the company's stock performance. Piper Sandler's stance indicates a continued positive outlook on the company despite the recent adjustments.
InvestingPro Insights
As UnitedHealth Group (NYSE:UNH) approaches its earnings report date, investors are closely monitoring the company's performance metrics. According to InvestingPro data, UnitedHealth has a market capitalization of $414.92 billion and is trading at a P/E ratio of 18.71, which is slightly lower than the adjusted P/E ratio for the last twelve months as of Q4 2023, at 18.54. This suggests a stable valuation relative to its earnings. The company's revenue growth for the last twelve months, as of Q4 2023, stands at a robust 14.64%, underlining its strong market position.
Two notable InvestingPro Tips for UnitedHealth include the company's consistent track record of raising its dividend for the last 14 consecutive years and its status as a prominent player in the Healthcare Providers & Services industry. These factors may offer investors reassurance about the company's stability and commitment to returning value to shareholders. Moreover, with the stock trading near its 52-week low, there may be a potential opportunity for investors considering entry points.
For those seeking a deeper analysis, there are additional InvestingPro Tips available, which could provide further insights into UnitedHealth's financial health and market performance. To explore these tips and gain a comprehensive understanding of UnitedHealth's investment potential, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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