UnitedHealth Group
The country’s largest health insurer, UnitedHealth Group Inc. (NYSE: UNH), has posted a share price increase of 5% over the past 12 months. The company recently raised its full-year earnings guidance, expecting an increase in demand for elective surgeries. That may be a double-edged sword and increase payouts to its customers. To guard against that, UnitedHealth may end up raising rates.
Analysts remain bullish on the stock, with 21 of 25 assigning a rating of Buy or Strong Buy. The other four have Hold ratings. At a share price of around $524.00, the upside potential based on a median price target of $561.00 is 7.1%. At the high target of $650.00, the upside potential is 24%.
The consensus estimate for third-quarter revenue is $91.41 billion, down 1.6% sequentially and up 13.0% year over year. Analysts expect adjusted EPS of $6.36, up 3.6% sequentially and by 9.8% year over year. For the full 2023 fiscal year, analysts are forecasting EPS of $24.87, up 12.1%, on revenue of $367.77 billion, up 13.5%.
UnitedHealth stock trades at 21.0 times expected 2023 EPS, 18.7 times estimated 2024 earnings of $27.95 and 16.6 times estimated 2025 earnings of $31.56 per share. The 52-week trading range is $445.68 to $558.10. The Dow Jones industrial average component pays an annual dividend of $7.06 (yield of 1.35%). Total shareholder return for the past 12 months was 6.47%.
Wells Fargo
Wells Fargo & Co. (NYSE: WFC) is the nation’s third-largest bank. Its share price has dipped by about 3.7% over the past 12 months, virtually all of it coming in the year to date. Analysts expect net interest income for the third quarter to be in line with prior-quarter results.
The Consumer Financial Protection Bureau (CFPB) on Wednesday issued an advisory opinion regarding the banking industry’s so-called junk fees. According to the CFPB, Wells Fargo charged overdraft fees totaling $1.4 billion in 2021. The bank no longer charges that fee.
Analysts remain moderately bullish about Wells Fargo. Of 27 brokerages covering the bank, 10 have a Hold rating and 17 have a Buy or Strong Buy rating . At a share price of around $40.00, the upside potential based on a median price target of $51.00 is 27.5%. At the high price target of $61.00, the upside potential is 52.5%.
Analysts are expecting third-quarter revenue to total $20.07 billion, down 2.3% sequentially but 2.9% higher year over year. Analysts forecast adjusted EPS at $1.24, down 1.1% sequentially and by 4.6% year over year. For the full 2023 fiscal year, the consensus EPS forecast calls for a year-over-year increase of 9.1% to $4.86, on a 9.9% revenue increase to $81.11 billion.
Wells Fargo stock trades at 8.2 times expected 2023 EPS, 8.4 times estimated 2024 earnings of $4.71 and 7.7 times estimated 2025 earnings of $5.14. The 52-week trading range is $35.25 to $48.84. Wells Fargo pays an annual dividend of $1.40 (yield of 3.52%), and total shareholder return for the past 12 months was negative 1.03%.
Originally published at 24/7 Wall St.
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