UnitedHealth Stock Wavers After Q2 Earnings Beat, Profit Warning

Additionally, UNH will maintain its prior full-year earnings forecast

Assistant Editor
Jul 15, 2020 at 10:40 AM
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UnitedHealth Group Inc (NYSE:UNH) stepped into the earnings confessional this morning, reporting second-quarter results that came in well above analysts' estimates. UnitedHealth's revenue, on the other hand, couldn't match Wall Street's forecasts. Profits were reportedly propped up by lower medical costs related to the pandemic, but UNH warned that the rising costs of a rebound, as Americans begin coming in for less urgent procedures, could have an effect on profits later this year. As a result, the company maintained its prior full-year adjusted profit forecast. At last check UNH is up 0.5% to trade at $309.42.

When we last covered UnitedHealth stock, we noted it was one of the best to own in June. And in one month's time, the stock managed to tack on roughly 7.8%, with solid support at the 60-day moving average giving the equity a gradual boost. Plus, this trendline has helped guide UNH back within reach of its June 8 all-time high of $315.84.

Meanwhile, the brokerage bunch is eyeing UNH with bullish ferocity. Of the 17 in coverage, 15 sport a "strong buy" recommendation, versus just two "holds." Plus, the consensus 12-month target price of $332.60, is a healthy 8.1% premium to current levels.

Options traders, however, are picking up long puts at much quicker-than-usual clip. This is per the security's 50-day put/call volume ratio of 0.79 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 94% of readings in its annual range.

Bullish bets are heavily favored today, though. So far, over 16,000 calls and 5,018 puts have crossed the tape -- four times the average intraday amount. Most popular is the July 315 call, followed closely by the 320 call from the same series, with positions being opened at the former.

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