Jim Cramer on UnitedHealth Q3 earnings: ‘UNH is back’

UnitedHealth Group Inc (NYSE: UNH) popped 2.0% on Friday after reporting better-than-expected financial results for its third quarter.

UnitedHealth raises full-year outlook

The stock is being rewarded also because UNH slightly raised its guidance for the full year.

UnitedHealth is now calling for its per-share earnings on an adjusted basis to fall between $24.85 and $25 in fiscal 2023. Its previous outlook was for $24.70 to $25.

Andrew Witty – its Chief Executive also said in a press release today that the managed-care company is well-positioned to “generate strong, diversified growth in the coming years”.

Shares of UnitedHealth have already gained about 18% over the past three months but famed investor Jim Cramer remains constructive on this “amazing health insurer”.

Jim Cramer shares his view on UNH stock

Medical loss ratio stood at 82.3% in the third quarter – about 50 basis points better than the consensus estimates which, as per Cramer, is a sign that “UNH is back”.

Earlier this year, UnitedHealth had warned of increasing costs as seniors opted for non-urgent surgeries they had to postpone during the pandemic but that overhang “is now over”.

Jim Cramer said the earnings release was a positive news for the broader space as UNH is a “key component in the health-care universe”. Shares of peer Humana that his Charitable Trust owns are also up 2.0% at writing.

Wall Street currently has a consensus “buy” rating on UnitedHealth and sees upside in its shares to $571 on average – up about 8.0% from here.

UnitedHealth Q3 earnings snapshot

• Earned $5.841 billion versus the year-ago $5.262 billion
• Per-share earnings also jumped from $5.55 to $6.24
• Adjusted EPS printed at $6.56 as per the earnings report
• Revenue went up 14% year-on-year to $92.361 billion
• Consensus was $6.33 a share on $91.414 billion revenue

The healthcare stock has more than doubled since its record low at the peak of the COVID pandemic.