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What Do Analysts Recommend for UNH ahead of 2Q16 Earnings?

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Jul. 14 2016, Updated 9:04 a.m. ET

Analysts’ recommendations

Based on the recommendations of 29 brokerage firms in a Bloomberg survey, 84.6% of firms gave UnitedHealth Group (UNH) a “buy” recommendation, while 15.4% of firms rated the company a “hold.” None of the firms rated UnitedHealth Group a “sell.”

If UnitedHealth Group’s share price manages to reach this target, it could have a positive impact on the Health Care Select Sector SPDR Fund (XLV). UnitedHealth Group makes up about 4.9% of XLV’s total holdings.

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Company fundamentals

A diversified business model has been the key driver of UnitedHealth Group’s consistent revenue and earnings growth. Additionally, the Optum business has helped the company to significantly reduce its medical costs. Through multiple initiatives, UnitedHealth Group has managed to generate PMPM (per month per member) healthcare savings in the range of $10–$20.

Peer comparisons

Based on a Bloomberg survey of 23 broker firms, Anthem (ANTM) received “buy” recommendations from 61.9% of firms and “hold” recommendations from 38.1% of firms. None of the firms rated Anthem a “sell.”

Among the 21 brokerage firms surveyed by Bloomberg for Cigna (CI), 70.6% gave it a “buy” recommendation, while 29.4% gave it a “hold” recommendation.

Based on the recommendations of 25 broker firms in a Bloomberg survey, Aetna (AET) received “buy” recommendations from 68.2% of firms and “hold” recommendations from 27.3% of firms. Only 4.5% of the firms rated Aetna a “sell.”

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