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UnitedHealth Stock Rose on Q3 Results as COVID Costs Shrunk

Simon Mugo trader
Updated 14 Oct 2022

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Key points:

  • UnitedHealth stock edged higher on upbeat Q3 results and EPS.
  • The insurer attracted more clients cementing its leading position.
  • However, there was little movement in UNH stock since institutions mainly held it.

The UnitedHealth Group Inc (NYSE: UNH) stock price increased after revealing that it generated revenues worth $80.89 billion in Q3, beating analysts’ estimates of $80.5 billion. In addition, the company’s Q3 EPS came in at $5.79 versus consensus estimates of $5.42.

The healthcare and insurance multinational firm also noted that its medical care ratio, the percentage of premiums versus claims payouts, had fallen to 81% in Q3 from 83% in Q2. The company attributed the improvements to lower payouts driven by fewer COVID-related hospitalisation periods compared to other periods.

Also read: Best Healthcare Stocks To Buy Right Now.

UnitedHealth continues to expand its presence across the United States and has attracted 850,000 new customers this year, 185,000 of which joined the insurer in Q3 2022. As a result, the firm’s quarterly profits surged to $5.26 billion ($5.55 per share) from $4.09 billion ($4.28 per share) in Q3 2021.

The company raised its full-year profit target to $21.85 – $22.05 per share compared to its initial guidance of $21.40 – $21.90. The firm continues to cement its position as the largest insurer in the United States, as evidenced by the hundreds of thousands of new clients it has attracted.

UnitedHealth further attributed its impressive performance to lower COVID-19 testing and treatment costs, which helped keep medical costs low during the third quarter. Investors were pleased by today’s Q3 results, but given that institutions primarily hold UNH shares, there was little movement in the insurer’s stock price as expected.

Institutions do not change their minds quickly about stocks; they tend to make their stock purchases way after the earning season passes, not during the season.

Andrew Witty, UnitedHealth Group’s CEO, said: “The strength of our performance reflects the diligence and determination of our colleagues to improve people’s experience across the healthcare system and make high-quality care simpler, more accessible and more affordable.”

*This is not investment advice.

UnitedHealth stock price.

UnitedHealth stock price 14-10-2022
Source: Tradingview

UnitedHealth stock price edged 1.19% higher to trade at $516, rising from Thursday’s closing price of $509.91.

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading