Join        Login             Stock Quote

UnitedHealth (UNH) Upgraded To 'Outperform' By Oppenheimer, PT Raised

 February 21, 2013 12:36 PM

(By Balachander) UnitedHealth Group Inc. (NYSE: UNH) shares were upgraded to "Outperform" from "Perform" and price target raised to $66 from $63 by Oppenheimer.

The brokerage believes that UNH's current discounted multiples appear attractive in light of the overly-pessimistic outlook regarding the impact of the ACA, and the recent pull-back related to MA rates.

Further, Oppenheimer wrote it has increased confidence that FY2013 results will outperform expectations.

"With strong cash flow, a well-diversified portfolio and a strong track record of performance, we would be buyers of UNH," the brokerage wrote in a note.

[Related -E*TRADE Financial Corporation (NASDAQ:ETFC): Insider Buying: This Director Throws Darts.]

Oppenheimer said United's current portfolio provides diversification across a number of businesses with strong growth prospects. In particular, the company's opportunities within pharmacy, health IT and international markets are in areas where it still has low penetration, which should shield it from the risks around the new domestic health insurance regulations.

The company eased concerns around its relatively lower cost trend expectations by referring to the '13 pricing environment as stronger than '12, the brokerage said. Oppenheimer said that the company was still able to maintain UnitedHealthcare segment margins in '12, giving hope that FY2013 guidance for lower healthcare margins will prove conservative.

[Related -How To Profit From The Shutdown Aftermath]

"Overall, UNH continues to perform well operationally, and although 2014 will likely be a hurdle, the company should outperform expectations.

Furthermore, management has set impressive longer-term goals that include EPS growth of 13 percent-16 percent, which would certainly lead to outsized investor returns," Oppenheimer wrote.

Minnetonka, Minnesota-based UnitedHealth offers products and services through two platforms: UnitedHealthcare, which provides health care coverage and benefits services; and Optum, which provides information and technology-enabled health services.

The stock, which has been trading in the 52-week range of $50.32 to $60.75, slid 0.24 percent to trade at $55.08 on Thursday.



Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageBogle Says Indexing Destined To Win The Battle Of The Quants

Vanguard founder John Bogle gave a powerful speech last month at the Q Group’s Spring Seminar that lays out read on...

article imageVMAX and VMIN Poised to Be Most Important VIX ETP Launch in Years

REX Shares is launching two new VIX exchange-traded products on Tuesday in what is likely to be the most read on...

article imageThe April 29 Gold Triangle Breakout Update

If you’re just watching stocks, you may be missing this powerful Triangle Breakout surge in read on...

article imageSell In May, But It Is A Presidential Election Year

With May just around the corner, articles covering the "Sell in May' phenomenon are not in short supply and read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.