Investors Await Q1 ReportKey arguments in support of the idea.
โช UNH stock has come under pressure from a series of adverse events,
though Q1 earnings may improve investor sentiment regarding further
UNH business growth potential.
โช A good moment for buying, both fundamentally and technically.
Investment Thesis
UnitedHealth Group (UNH) engages in the provision of health insurance,
software, and related consulting services. UNH is the largest provider of
healthcare plans in the US.
In Early 2024, UNHโs Stock Came Under Pressure from Several
Adversities at Once . First, it is a cyberattack on Change Healthcare
services, that led to a temporary freeze on payments from medical
organizations. At the time of finalizing this report, UnitedHealth informed
that services were restored, and that it did not expect big implications for
financial results. However, market participants fear a one-time negative
impact on profitability in Q1 2024.
Shortly after the cyberattack, it was reported that the US Department of
Justice had initiated an antitrust investigation for examining the strength of
relationship between UnitedHealthโs insurance and medical business
divisions. The impact of the investigation is uncertain, and we do not
believe it to influence the stock in the short term.
Investors Were Disappointed by CMSโ Final Decision on Medicare
Advantage (MA) Payment Rates. On April 2, MA plan rate rises for 2025
compared to 2024 became finally known. The payout rate remained at the
proposed level of 3.7% y/y, disappointing investors looking for a bigger
increase. This caused a negative market reaction: UNH, the largest player,
ended the April 2 trading with a 9.3% drop. Some other major stocks
reacted that day accordingly: HUM (-13.4%), CVS (-7.2%), ELV (-3.3%).
The worsened MA business revenue expectations for 2025 are already
reflected in prices. However, the Optum segmentโs organic growth
(OptumHealth, OptumInsight, and OptumRx) remains a strong point of the
Company and may support its Q1 2024 results that will be released on
April 16.
Expectations for Q1 Report. We think that investors will be focused on the
guidance for 2024. Managementโs confirmation or improvement of the
existing guidance could dispel investor worries. Besides, we expect a
detailed commentary on the impact of the cyberattack and the MA rate
decision on financial results.
Now Is a Good Time to Buy. The P/E NTM ratio has decreased to 15.8,
which is lower than the Companyโs all-time average of 18.8. The RSI has
dropped below 30 points, signaling a likely reversal. We consider UNH
sharesโ current weakness as a good opportunity to buy, assuming that (1)
the impact of the approved MA 2025 rate is already reflected in prices, (2)
the cyberattack will have a one-time insignificant implication for UNH, and
(3) there is still a high demand in the MA market, and UNH remains the
largest and growing provider of healthcare plans.
The target price for UNH over a 2-month horizon is $495, which
corresponds to P/E NTM of 18. We recommend Buying and setting a
Stop Loss at $415.
UNHD trade ideas
UnitedHealth (UNH) Share Price Surges after Strong ReportUnitedHealth (UNH) Share Price Surges after Strong Report
UnitedHealth shares surged Tuesday, rising more than 5% after the health care giant delivered stronger-than-expected first-quarter 2024 results:
โ earnings per share: actual = USD 6.91, expected = USD 6.61, last quarter = USD 6.16;
โ gross income: actual = USD 94.4 billion, expected = USD 92.1 billion.
UnitedHealth CEO Andrew Whitty said health care costs rose sharply last year, and he attributed much of the rise to the effects of the Covid-19 pandemic.
Also adding positive news to investors was UnitedHealth Group's handling of the Feb. 21 cyberattack on its Change Healthcare subsidiary, which disrupted hospital and pharmacy operations for more than a week and cost an estimated USD 872 million.
Technical analysis of the UNH stock chart shows that:
โ starting in 2022, the price moves within the range between support at USD 450 and resistance at USD 550 per share;
โ false breakouts of the indicated levels occurred repeatedly;
โ as a result of the publication of the report, another false breakdown of support was formed at USD 450 per UNH share;
โ growth after the report occurred with a gap in the area of USD 450-465, which can serve as support;
โ it is possible that a test of the gap will form on the chart and growth will at least reach the mid-channel level of USD 500 per share.
According to analysts surveyed by TipRank, the average price forecast for UMH shares is USD 591.29 in 12 months (more than +25% from the current price).
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
UnitedHealth Shares Surge 4.91% on Q1 Earnings UpdateUnitedHealth Group ( NYSE:UNH ), the titan of the health insurance industry, emerged triumphant in the face of daunting challenges as it delivered a stellar performance in its first-quarter earnings update. Despite grappling with a surge in medical payouts and the financial fallout from a crippling cyberattack, UnitedHealth's resilience shone through, propelling its shares to a robust 4.91% surge in early trading.
Earnings Beat and Resilience:
UnitedHealth ( NYSE:UNH ) reported adjusted earnings of $6.91 per share for the first quarter, exceeding Wall Street's expectations by 30 cents. The impressive 10.4% year-over-year growth underscored the company's ability to navigate turbulent waters while maintaining its upward trajectory.
Revenue Strength and Optum Dominance:
Bolstered by robust revenue figures, UnitedHealth showcased its financial prowess with group revenues surging 8.55% to $99.8 billion. Notably, Optum, the crown jewel of UnitedHealth's empire, saw its revenue soar 22.2% to $61.1 billion, cementing its position as the primary engine of the group's earnings growth.
Medical Cost Challenges and Cyberattack Fallout:
Amidst the triumph, UnitedHealth ( NYSE:UNH ) faced headwinds in the form of rising medical costs, reflected in a nearly 2-percentage-point increase in the medical-cost ratio to 84.3%. Furthermore, the company grappled with the aftermath of the Blackcat cyberattacks, which inflicted an $872 million blow to its Change Healthcare unit. Despite these setbacks, UnitedHealth ( NYSE:UNH ) remained steadfast in its commitment to delivering value to its stakeholders.
Outlook and Forward Momentum:
CEO Andrew Witty reaffirmed UnitedHealth's full-year adjusted earnings forecast, projecting a range between $27.50 and $28 per share. However, the company acknowledged the looming impact of the cyberattack, with potential costs soaring to as high as $1.6 billion for the year. Despite these challenges, Witty emphasized the company's unwavering focus on enhancing customer experiences and driving balanced growth.
Market Response and Sector Challenges:
The market responded enthusiastically to UnitedHealth's resilience, with shares surging 7.75% in pre-market trading. However, the broader healthcare sector faces mounting pressures, including tepid Medicare Advantage payment increases and regulatory scrutiny on pharmacy-benefit managers. Nonetheless, UnitedHealth's robust performance signals a beacon of hope amidst the industry's tumultuous landscape.
The importance of identifying our control algorithmHere you can see the slightest difference between orange controlled buying and magenta controlled selling - but the fact that magenta has proven control over the past 2 bounces indicates that magenta is in control and this is in fact a larger liquidity build for the bulls.
Helpful to know this for all future analysis!
Happy Trading :)
- TraderDaddyOG
UNH UnitedHealth Group Incorporated Options Ahead of EarningsIf you haven`t bought UNH before the previous earnings:
Then analyzing the options chain and the chart patterns of UNH UnitedHealth Group Incorporated prior to the earnings report this week,
I would consider purchasing the 440usd strike price at the money Puts with
an expiration date of 2024-4-19,
for a premium of approximately $10.65.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
UnitedHealth Group Incorporated (UNH) - Technical Analysis UnitedHealth Group Incorporated (UNH) exhibits technical deterioration as observed in the recent trading sessions. The stock closed at $441.72, experiencing a 1.85% decline. The bearish sentiment is reinforced post-market, with the stock slipping further to $443.00.
The technical layout suggests a continuation of the downward trajectory. The price action has decisively breached below the Ichimoku Cloud, a bearish signal indicating that sellers are currently in control. The Cloudโs future span also slopes downward, reinforcing this negative outlook.
The Fibonacci retracement levels, drawn from the swing high at $496.20 to the swing low at $431.58, indicate that the price has struggled to reclaim even the 23.6% level at $480.15, showing a lack of bullish momentum. The subsequent support levels at 0.382 ($471.52) and 0.5 ($463.89) have failed to catalyze a rebound, with the current price action hovering just above the 0.618 Fibonacci level at $456.26, which may serve as the next support.
The RSI is deep in the oversold territory at 24.36, often considered an area where a potential reversal could occur. However, the continued presence in this region without a significant bounce raises concerns about persistent selling pressure.
The MACD remains below the signal line and has widened negatively, indicating strengthening bearish momentum. The absence of a bullish crossover on this oscillator suggests that the path of least resistance remains to the downside.
The OBV shows a sharp volume increase on down days, highlighting an aggressive distribution phase. This points to a strong conviction among sellers and is often a precursor to further declines if the pattern persists.
Given the bearish technical indicators coupled with the proximity of the next earnings report in four days, traders may expect heightened volatility. The earnings report could act as a pivotal event that either exacerbates the downtrend or triggers a relief rally if the companyโs performance exceeds market expectations.
Speculatively, should the earnings report provide a positive surprise, resistance levels to watch in a bounce scenario would be the 0.618 Fibonacci level at $456.26 followed by the 0.5 level at $463.89. Conversely, a disappointing report could see the stock testing the 0.786 level at $445.41, with further downside potentially exposing the $431.58 swing low.
Investors should brace for increased volatility and trade cautiously, with protective stops and close attention to the forthcoming earnings release, which will likely dictate the short-term trend for UNHโs stock price.
Good enter pointNYSE:UNH reached 450 $ recently.
From December 2021 never reached bellow this level. It tried 450 $ six times and bounced back to 550 $. From December 2021 NYSE:UNH is is swing in a channel between 450 and 550 $.
In weekly chart, it is on 200 days moving average, which seems a very strong support. From December 2021 it always trades above 200 days moving average. In march 2020 it touched the moving average, however, it bounced back and moved higher.
I believe NYSE:UNH could easily reach 500 $ in near future and 500 $ is not out of reach.
I set my stop loss at 435 $.
Good luck to everybody.
UnitedHealth: Recovery? ๐ฉนUnitedHealth shares have now dipped into the green Target Zone between $447.18 and $470.19. This is the price range in which we expect the low of the green wave (B) and thus a reversal. We therefore now expect a rise to above $495.87. At 40%, however, we think it is likely that the price will slip below the zone again and the low of the green wave alt.(B) will end somewhat lower.
Medicare Advantage Rates Shake Health Insurers:The healthcare sector witnessed a significant upheaval as UnitedHealth ( NYSE:UNH ) and other major players tumbled following the Biden Administration's announcement regarding Medicare Advantage rates for 2025. The unexpected decision sent shockwaves through the industry, prompting a flurry of market activity and sparking concerns among investors.
Impact on Health Insurers:
The Biden Administration's announcement that final Medicare Advantage rates in 2025 will remain unchanged from initial plans in January dealt a blow to major health insurers, particularly UnitedHealth and Humana. Both companies, as leading Medicare Advantage players, experienced substantial declines in their stock prices, with Humana plunging 9.4% and UnitedHealth sinking 4% in premarket trading.
Market Response and Investor Sentiment:
The market response was swift and decisive, with other health insurers such as CVS Health and Cigna also witnessing notable retreats in their stock prices. CVS Health, a significant Medicare Advantage player, saw its stock retreat by 4% overnight, while Cigna experienced a 1.1% dip early Tuesday. Smaller players in the Medicare Advantage market, including Centene and Molina Healthcare, were not spared from the downturn, reflecting the broad impact of the announcement on the industry.
Technical Outlook and Bearish Trend:
UnitedHealth's stock is currently entrenched in a bearish trend, underscored by a Relative Strength Index (RSI) of 44.88 and trading below its respective Moving Averages (MA). This technical analysis further validates the bearish sentiment surrounding NYSE:UNH stock and highlights the challenges it faces in the current market environment.
Implications for the Healthcare Sector:
The Biden Administration's decision regarding Medicare Advantage rates in 2025 has far-reaching implications for the healthcare sector, potentially reshaping the competitive landscape and impacting revenue streams for major insurers. As companies navigate this period of uncertainty, strategic agility and resilience will be crucial in mitigating risks and seizing opportunities amidst evolving market dynamics.
UNITED HEALTH Time to buy again?Last time we looked into United Health (UNH) we gave a strong buy signal (October 03 2023, see chart below), which turned out to be very successful:
After getting rejected on Resistance 3, the stock started to decline structurally within a Channel Down. It is a pattern similar to the Channel Down of November 2022 - March 2023, which was again formed after UNH got rejected within the 2-year Resistance Zone, like it happened this time.
There is a high symmetry these past 2 years within the Resistance and Support Zones, so we expect the price to act accordingly. As a result, having already formed a 1D Death Cross, we expect the price to make one last Low towards the Support Zone (as long as the 1D MA50 holds as Resistance) and then rebound, which is what took place on March 10 2023, above the 0.618 Fibonacci retracement level.
As a result, we will time our buy accordingly and target $517.00 (Fib 0.618). An additional buy signal would be if the 1W RSI makes a Double Bottom, similar again to March 10 2023.
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UnitedHealth Weekly Wyckoff in progressWe can observe a weekly Wyckoff in place for UnitedHealth.
I have Two possible scenario
1) The price took the weekly liquidity (External Liquidity) and can now go Up until reaching "BC" at least
2) The price will go down and take frist the "STB" to make a "SPRING" and then will go UP until the "BC"
On my side I prefer to keep observing as the price can be slide in this kind of structure.
Healthy Returns: Going Long on United Health GroupThis is a trading idea with a medium-term horizon spanning a few weeks. We're observing United Health Group's stock stabilizing at a significant level on the daily chart. Concurrently, there's an emerging hidden bullish divergence in the OBV, albeit unconfirmed. Given UNH's price reaction at the support zone, we're considering a long trade. Our target is the low of the candle from January 11, 2024, which initiated the as yet unfilled gap. We're doing this because in overarching downtrends, prices tend not to fully close gaps but rather turn at the low of the candle before the gap. While we don't perceive United Health Group to be in a predominant downtrend, given the trade's highly favorable risk-reward ratio of 3:1, we're cautious about unnecessary risks.
UNH will recover from selloff on the Change Hlthcare cyberattackUNH has typically performed well in the market. Buying the dip on some just chance unfortunate news regarding the cyber attack that brought Change Healthcare down. I have held positions in UNH for over 15 years. This is a good one to buy and hold. Change my mind.
UnitedHealth: One Last Dip ๐ฆUnitedHealth's share price has fallen sharply in recent weeks. However, it showed a reaction at the support level of $472.12 and has now risen a little. Our expectation is that it is currently working on the magenta wave (Z), the last sub-wave of the green wave (B). As part of this movement, the price should dip below the support level and form a low there. Only then should the price turn around.
UNH Stock tumble after report of antitrust investigationUnitedHealth Group ( NYSE:UNH ) finds itself navigating turbulent waters as it confronts both regulatory scrutiny and cybersecurity disruptions. The recent revelation of a U.S. Department of Justice antitrust investigation has sent shockwaves through the healthcare conglomerate, causing its shares to plummet by about 5%. This investigation, as reported by The Wall Street Journal, casts a shadow over UnitedHealth's ( NYSE:UNH ) acquisitions made through its health services arm, Optum, raising concerns about potential monopolistic practices and their impact on competition within the healthcare industry.
The timing couldn't be more precarious, as UnitedHealth ( NYSE:UNH ) grapples with the fallout from a cybersecurity attack on its Change Healthcare unit, which has led to an eight-day outage. The prolonged disruption has not only rattled investor confidence but has also triggered operational challenges for the conglomerate and its partners, including pharmacy chains like CVS Health.
Analysts are quick to underscore the significance of these developments. Scott Fidel, an analyst at Stephens, aptly describes it as a "tough past week of headlines for UnitedHealth." The market reaction has been swift and severe, with more than $25 billion wiped out from UnitedHealth's market value, exacerbating losses incurred earlier in the week.
The ramifications of the reported antitrust probe extend beyond UnitedHealth ( NYSE:UNH ), casting a shadow of uncertainty over its competitors. Humana and CVS Health, both with aspirations in caregiving akin to UnitedHealth's Optum arm, have witnessed declines in their respective stock prices, signaling investor apprehension about the potential ripple effects of the investigation.
Julie Utterback, an analyst at Morningstar, underscores the interconnectedness of the healthcare landscape, suggesting that the investigation could have implications for CVS and Humana, especially if it expands further.
The specifics of the investigation delve into the intricate relationships between UnitedHealthcare ( NYSE:UNH ) and Optum, probing into potential conflicts of interest and anti-competitive behaviors. Such scrutiny underscores the complexities inherent in the intersection of insurance and healthcare services, where conglomerates like UnitedHealth wield considerable influence.
Meanwhile, Change Healthcare continues to grapple with the aftermath of the cybersecurity incident, with disruptions expected to persist. The impact reverberates across the healthcare ecosystem, affecting not only UnitedHealth but also its partners and clients, including pharmacy chains reliant on its services.
As UnitedHealth ( NYSE:UNH ) navigates these challenges, stakeholders are left pondering the company's resilience and the broader implications for the healthcare industry. Will regulatory scrutiny force a reassessment of consolidation strategies? Can UnitedHealth ( NYSE:UNH ) effectively mitigate cybersecurity risks and restore trust in its operations?
Buy UNH | Profit Target @ $541UNH has been in a long-term uptrend channel for 6-10 years with steady growth. They're currently bouncing off the bottom of the trend channel within 1 ATR of their AVWAP (anchored from the prior high). The 3 ATR profit target at $541 is $14 above current price representing a 3:1 Risk/Reward. The next major resistance is at $558 ($17 above the target). Adding fuel to the fire, a 65-min TTM squeeze just fired! A March 5/35/540/545 call butterly can be had for .54, which would provide a max profit of $446 and max loss of $54. Alternatively, you could sell the 520 PUT for $5.55 (or maybe do both :)
UNH, the dominate health insurance market leader LONGAs shown on the 4H chart, UNH based on a long-term VWAP band setup, it as fiar value for the
first time since September. This dip is significant as price fell from a head and shoulders pattern
of three months duration. The candles in the past couple of days show the reversal at the
mean VWAP support. I have retrieved 60% out of a near term expiration call option. Some may
say this is simply a death cross on a pair of moving averages with a bit of correction on the
overall downtrend. I understand that point of view. Notwithstanding that perspective,
healthcare is expected to be an outperforming sector in 2024. UNH is on sale. As a healthcare
provider, it has paid me large sums in the historical past. I will take trades as described
in the text box on the chart. I believe buying out of the money and at a discount will be
a good strategy for this megacap moving forward.