UnitedHealth Group Stock: Is This The Bottom?

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Shares of UnitedHealth Group (NYSE:UNH) surged within the wake of the Q4 results and 2023 guidance, but the underside might not be in. The outcomes were higher than expected, however the outperformance was slim, and the guidance was mixed. The takeaway for investors is that a bottom could also be in, but there may be a risk the stock could fall to a brand new low as well.

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Q4 2022 hedge fund letters, conferences and more

 

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But that’s the near-term story. The long-term story is that UnitedHealth Group continues to grow and penetrate its markets with more depth which is a double tailwind for the stock. This will be seen within the charts, which show downward pressure inside a robust uptrend. Because of this UnitedHealth Group is a Hold and can develop into a buy once the underside has been confirmed.

UnitedHealth Group Outperforms In Q4

UnitedHealth Group outperformed in Q4, but that could be a leading statement. The corporate posted $82.8 billion in net revenue for a gain of 12.3% versus last yr, and it beat the consensus by 32 basis points or about 0.3%. The strength is sweet to see and will help support price motion, however it will not be a catalyst for rallying.

Inside that, each segments saw double-digit growth, with UnitedHealth leading the best way. There was a slight increase in medical care costs on an earnings basis, but efficiency improvements offset that. The operating margin improved by 90 basis points and the online margin by 30 to drive outperformance on the underside line. The caveat is that bottom-line strength is as slim because the top-line and the guidance is mixed.

Earnings of $5.34 are up 17% from last yr, which is sweet news. The bad news is that this also isn’t a robust catalyst for rallying and should not result in higher prices immediately. As for the guidance, the corporate reaffirmed its guidance last fall, which is mixed in relation to the Marketbeat.com consensus estimates.

The revenue is predicted to return above consensus, however the earnings are forecast to return below. On this light, the corporate may outperform again, but it should should accomplish that in a much stronger fashion to impress the market.

The Analysts Are Buying UnitedHealth Group

The post-release analysts’ activity has been light to date, but there are 2 takeaways from the info. The first is the analysts have the stock pegged at a Moderate Buy, which has held regular for greater than a yr. The 2nd is the value goal. The value goal is greater than 22.0% above the post-release price motion, which is trending higher.

The last major report on the Marketbeat.com analyst tracking page got here out in early December from Credit Suisse. They’ve the stock rated at Outperform and upped their goal to above the present consensus figure.

They got here out and reiterated that position within the wake of the Q4 results and listed the stock as considered one of their HOLT ideas for 2023. HOLT stocks are Outperform-rated stocks with the least demanding market expectations.

The Technical Outlook: UnitedHealth Group Could Be At Bottom

The value motion in UnitedHealth Group definitely heated up following the Q4 release. The stock popped and showed signs of bottoming, however the late-day motion confirms resistance remains to be present. This may lead to additional volatility if not some actual downside, within the near term, however it does appear like the stock might be near a turning point.

 

The long-term trend is upward, and price motion is below the 150-day EMA and at some extent where reversals have occurred previously. Assuming the market repeats, this stock should begin bottoming this week or soon after. If not, this market could have entered a consolidation range that might keep it moving sideways until later within the yr.

UnitedHealth

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While UnitedHealth Group currently has a “Moderate Buy” rating amongst analysts, top-rated analysts imagine these five stocks are higher buys.

Article by Thomas Hughes, MarketBeat

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