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

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on Oct 13, 2023
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  • UnitedHealth reports better-than-expected results for its fiscal Q3.
  • Jim Cramer says UNH is a key component in the healthcare universe.
  • UnitedHealth stock has gained 18% over the past three months.

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

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UnitedHealth raises full-year outlook

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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

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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

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  • 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.

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