UnitedHealth Group (NYSE:UNH) Stock Price Down 4.6% on Disappointing Earnings

Key Points

• UnitedHealth Group's stock price fell 4.6% after the company reported weaker-than-expected quarterly earnings, with earnings per share of $4.08 missing estimates by $1.08.
• The company announced an increase in its quarterly dividend, raising it from $2.10 to $2.21, which represents a 3.30% yield.
• Several analysts downgraded their ratings and target prices for UnitedHealth Group, with Mizuho reducing its target from $515.00 to $350.00 while maintaining an "outperform" rating.

UnitedHealth Group Incorporated (NYSE:UNH - Get Free Report)'s share price was down 4.6% during trading on Tuesday after the company announced weaker than expected quarterly earnings. The company traded as low as $260.55 and last traded at $269.10. Approximately 21,043,308 shares traded hands during trading, an increase of 84% from the average daily volume of 11,449,892 shares. The stock had previously closed at $282.12.

The healthcare conglomerate reported $4.08 earnings per share for the quarter, missing the consensus estimate of $5.16 by ($1.08). UnitedHealth Group had a return on equity of 26.29% and a net margin of 5.39%. The business's revenue was up 12.9% compared to the same quarter last year. During the same period last year, the business posted $6.80 EPS.

UnitedHealth Group Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Tuesday, June 24th. Investors of record on Monday, June 16th were paid a $2.21 dividend. The ex-dividend date was Monday, June 16th. This is an increase from UnitedHealth Group's previous quarterly dividend of $2.10. This represents a $8.84 annualized dividend and a yield of 3.30%. UnitedHealth Group's payout ratio is 37.02%.

Wall Street Analyst Weigh In

A number of research firms have recently weighed in on UNH. Mizuho cut their target price on UnitedHealth Group from $515.00 to $350.00 and set an "outperform" rating for the company in a research report on Friday, May 16th. Wall Street Zen downgraded UnitedHealth Group from a "buy" rating to a "hold" rating in a research report on Saturday, May 24th. Robert W. Baird downgraded UnitedHealth Group from an "outperform" rating to a "neutral" rating and set a $312.00 price objective for the company. in a research report on Wednesday, June 11th. Oppenheimer dropped their price objective on UnitedHealth Group from $600.00 to $400.00 and set an "outperform" rating for the company in a research report on Wednesday, May 14th. Finally, Hsbc Global Res downgraded UnitedHealth Group from a "hold" rating to a "moderate sell" rating in a research report on Wednesday, May 21st. One analyst has rated the stock with a sell rating, nine have assigned a hold rating and fifteen have given a buy rating to the stock. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $392.29.

Insider Activity

In related news, CFO John F. Rex bought 17,175 shares of the company's stock in a transaction that occurred on Friday, May 16th. The stock was bought at an average cost of $291.12 per share, for a total transaction of $4,999,986.00. Following the acquisition, the chief financial officer directly owned 203,796 shares of the company's stock, valued at $59,329,091.52. The trade was a 9.20% increase in their position. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Patrick Hugh Conway sold 589 shares of the stock in a transaction dated Tuesday, June 10th. The shares were sold at an average price of $305.00, for a total value of $179,645.00. Following the sale, the chief executive officer owned 10,398 shares of the company's stock, valued at $3,171,390. This represents a 5.36% decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last three months, insiders purchased 109,408 shares of company stock worth $31,607,768. 0.28% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the company. Marshall & Sterling Wealth Advisors Inc. bought a new position in UnitedHealth Group during the 4th quarter valued at approximately $26,000. Hurley Capital LLC bought a new position in UnitedHealth Group during the 4th quarter valued at approximately $28,000. Bayforest Capital Ltd increased its holdings in shares of UnitedHealth Group by 685.7% in the 1st quarter. Bayforest Capital Ltd now owns 55 shares of the healthcare conglomerate's stock worth $29,000 after purchasing an additional 48 shares in the last quarter. Aster Capital Management DIFC Ltd bought a new stake in shares of UnitedHealth Group in the 4th quarter worth $30,000. Finally, Clal Insurance Enterprises Holdings Ltd increased its holdings in shares of UnitedHealth Group by 416.7% in the 1st quarter. Clal Insurance Enterprises Holdings Ltd now owns 62 shares of the healthcare conglomerate's stock worth $32,000 after purchasing an additional 50 shares in the last quarter. Hedge funds and other institutional investors own 87.86% of the company's stock.

UnitedHealth Group Trading Down 5.1%

The firm has a market cap of $242.76 billion, a P/E ratio of 11.21, a price-to-earnings-growth ratio of 1.39 and a beta of 0.45. The stock has a fifty day simple moving average of $300.91 and a 200 day simple moving average of $422.56. The company has a debt-to-equity ratio of 0.71, a quick ratio of 0.85 and a current ratio of 0.85.

UnitedHealth Group Company Profile

UnitedHealth Group Incorporated operates as a diversified health care company in the United States. The company operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health care coverage, and health and well-being services to individuals age 50 and older addressing their needs; Medicaid plans, children's health insurance and health care programs; and health and dental benefits, and hospital and clinical services, as well as health care benefits products and services to state programs caring for the economically disadvantaged, medically underserved, and those without the benefit of employer-funded health care coverage.

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