UnitedHealth: The 'Number One Company On Sale' Ahead Of Q4 Earnings Report

UnitedHealth Group Inc. UNH is gearing up to release its fourth quarter earnings report, and investors are watching closely. Stephanie Link, CIO at Hightower Advisors LLC, has dubbed the managed care giant the “number one company on sale” despite potential near-term earnings pressure.

‘They’re Probably Gonna Miss’ Q4 Earnings Expectations

With estimated earnings per share (EPS) of $6.73 and revenue projections around $101.75 billion according to Benzinga Pro data, UnitedHealth faces scrutiny over high utilization rates that could dent its profit margins.

On earnings, “they're probably gonna miss…because utilization rates are so strong, so high, and it hurts their cost,” Link remarked during CNBC's Halftime Report.

However, she sees this as a temporary hiccup, not a long-term trend.

Don't Miss:

• Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.
• If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?

From Beat-And-Raise To Strategic Patience

UnitedHealth, long celebrated for its consistent earnings beats, hasn't seen much stock movement in the past year, but that hasn’t dampened Link’s enthusiasm. “They have a gem with Optum,” she said, referring to the segment responsible for 24% of the company's revenue and 12% of operating profits.

Ongoing M&A activity is bolstering Optum's growth trajectory, even as the broader healthcare sector struggles to find favor with investors.

Chart created using Benzinga Pro

See Also: Commercial real estate has historically outperformed the stock market, and this platform allows individuals to invest in commercial real estate with as little as $5,000 offering a 12% target yield with a bonus 1% return boost today!

Technically, UnitedHealth shares are experiencing bullish buying pressure, with the stock trading above its eight, 20 and 200-day simple moving averages (SMAs).

At $543.74 per share, the price positions UNH stock as a bullish signal across these metrics, although its moving average convergence/divergence (MACD) indicator of a negative 6.15 suggests caution. Meanwhile, UNH stock’s relative strength index (RSI) of 56.86 signals moderate strength but room for additional upward movement.

A Buying Opportunity In The Making?

Historically trading at a premium valuation, UnitedHealth now sits at 17 times earnings, compared to its typical 21 times multiple. “When I owned it, it was trading at something like 25 times, and every quarter was a beat and raise,” Link noted. Despite the temporary pressure, she believes the stock’s visibility will only improve post-earnings.

Link remains bullish on UnitedHealth’s potential, citing strong fundamentals, a promising $18 billion buyback program and expectations of double-digit earnings and revenue growth ahead. “We’re gonna see double-digit growth in earnings and revenues,” she emphasized, viewing current regulatory and litigation concerns as mere “noise.”

UnitedHealth's premium status as the “number one managed care company” may make today’s market lull a golden opportunity for savvy investors.

Check It Out:

Arrived Achieved A Total Return of 34.7% On Their Biggest Sale Yet — Diversify Your Monthly Income Stream With Fractional Real Estate

Arrived allows individuals to invest in shares of rental properties for as little as $100, providing the potential for monthly rental income and long-term appreciation without the hassles of being a landlord. With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio. 

In October 2024, Arrived sold The Centennial, achieving a total return of 34.7% (11.2% average annual returns) for investors. Arrived aims to continue delivering similar value across our portfolio through careful market selection, attentive property management, and thoughtful timing in sales.

Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.

Photo: Shutterstock