UnitedHealth Group (UNH) is scheduled to report its second-quarter earnings on Thursday morning, with analysts anticipating earnings per share (EPS) of $4.85 and revenue of $110.77 billion. The stock is trading at $415.85, reflecting a decline of 2.20% as investors prepare for the report.

The forecast indicates nearly flat revenue growth year over year, a significant drop from the 12.9% increase reported in the same quarter last year. This decrease is something the market has accounted for, with estimates remaining stable over the last month.

In the previous quarter, UnitedHealth exceeded EPS expectations with a reported $7.23 against an estimate of $6.56, while revenue also surpassed expectations at $111.72 billion compared to the anticipated $109.57 billion. This marks three consecutive quarters of beating EPS estimates for the company.

Critical Metrics to Monitor

As the first major healthcare provider to announce earnings this season, UnitedHealth's report will be closely scrutinized without any peer comparisons to guide investor sentiment. Analysts have identified two major areas to watch:

  • Trends in Medicare Advantage membership, especially in light of a recent government payment increase.
  • Growth in the Optum segment, which provides services and pharmacy benefits.

Analysts have been adjusting their price targets in anticipation of the earnings report. TD Cowen maintained a Hold rating while raising its target to $430. Truist Securities adopted a more bullish stance, continuing its Buy rating with a new target of $480. Keybanc also increased its target to $475, sustaining an Overweight rating. These adjustments were made on July 14.

The consensus among analysts remains a Buy, with an average price target of $432.63, suggesting potential upside from current levels, provided the earnings report meets expectations.

Despite recent positive momentum in the healthcare provider sector, which has risen by 7.6% on average over the past month, UnitedHealth has struggled with revenue estimates in the past two years, complicating the outlook for Thursday's report.

UnitedHealth's earnings will be released before the market opens on July 17.

This material is for informational purposes only and does not constitute financial advice.