UnitedHealth Group Incorporated Annual Results: Here's What Analysts Are Forecasting For Next Year
UnitedHealth Group Incorporated (NYSE:UNH) came out with its yearly results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. Results were roughly in line with estimates, with revenues of US$242b and statutory earnings per share of US$14.33. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Check out our latest analysis for UnitedHealth Group
Taking into account the latest results, the latest consensus from UnitedHealth Group's 19 analysts is for revenues of US$261.8b in 2020, which would reflect a notable 8.1% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to rise 9.3% to US$15.66. Before this earnings report, analysts had been forecasting revenues of US$261.1b and earnings per share (EPS) of US$15.69 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$334. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values UnitedHealth Group at US$370 per share, while the most bearish prices it at US$297. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can also be useful to step back and take a broader view of how analyst forecasts compare to UnitedHealth Group's performance in recent years. It's pretty clear that analysts expect UnitedHealth Group's revenue growth will slow down substantially, with revenues next year expected to grow 8.1%, compared to a historical growth rate of 12% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 6.5% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkUnitedHealth Group will grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that UnitedHealth Group's revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on UnitedHealth Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple UnitedHealth Group analysts - going out to 2024, and you can see them free on our platform here.
You can also see whether UnitedHealth Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.