UNH - Embedded Expectations Analysis - 2018 10 26
UnitedHealth Group Incorporated (UNH:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 20.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about their growth in South America, Medicare Advantage offerings, and reduction of costsSpecifically, management is confident that their integration of medical and pharmacy information will simplify administration, improve drug selection, and reduce overall costs. Additionally, they are confident that their return on equity for Q3 2018 was 26%, and that they have the opportunity to transform the pharmacy-care services to positively impact people's lives. Moreover, they are confident that PBMs play an important role in providing discipline to drug price increases across the market. Furthermore, they are confident that they saw strong organic growth in South America, and that they are effectively managing medical cost trends. In addition, they are confident that they saw strong growth in their Medicare Advantage offerings in Q3 2018, and that they provide personalized navigation and new benefits without raising costs for the members of the program. However, they are also confident that their medical care ratio was lower than last year, primarily due to the impact of health insurance tax
UnitedHealth Group is a health care company. The company has four reportable segments across its two business platforms, UnitedHealthcare and Optum: UnitedHealthcare, which provides health care benefits to an array of customers and markets through its UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State and UnitedHealthcare Global; OptumHealth, which serves the physical, emotional and health-related financial needs of individuals; OptumInsight, which provides services, technology and health care knowledge to main participants in the health care industry; and OptumRx, which provides pharmacy care services and programs.
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