A week ago, UnitedHealth completed its merger with Change Healthcare, just two weeks after the U.S. Department of Justice lost a lawsuit against the $8 billion, all-cash deal. Over the past year, the health care providers and services industry has added nearly 18%, virtually the mirror image of the S&P 500, which has lost just over 18% during the same period.
Analysts remain strongly bullish on the stock, with 21 of 26 having a rating of Buy or Strong Buy and three more rating the shares at Hold. At a share price of around $499.80, the upside potential based on a median price target of $587.50 is about 17.5%. At the high target of $635.00, the upside potential is 27.1%.
The consensus estimate for third-quarter revenue is $50.54 billion, up about 0.3% sequentially and by 11.3% year over year. Adjusted EPS are tabbed at $5.44, down 2.4% sequentially but about 20.4% higher year over year. For the full 2022 fiscal year, analysts anticipate EPS of $21.89, up 15.1%, on revenue of $322.37 billion, up 12.1%.
UnitedHealth stock trades at 22.8 times expected 2022 EPS, 20.1 times estimated 2023 earnings of $24.87 and 17.6 times estimated 2024 earnings of $28.35 per share. The stock’s 52-week range is $368.11 to $553.29. UnitedHealth pays an annual dividend of $6.60 (yield of 1.32%). Total shareholder return for the past 12 months was 25%.
Wells Fargo
Wells Fargo & Co. (NYSE: WFC) is the nation’s third-largest bank (measured by market cap), and its share price has dipped by almost 15% over the past 12 months, the smallest decline of the country’s six largest banks. Since posting a 52-week low in mid-June, the stock has added about 10%.
Wells Fargo has said it plans to reduce its exposure to the U.S. housing market due to higher interest rates and a cooler market for mortgages. The good news for the bank is that most analysts believe that the remaining downside from its 2016 fake accounts scandal is likely to be less damaging.
Analysts remain bullish about Wells Fargo. Of 26 brokerages covering the bank, five have a Hold rating and 21 have a Buy or Strong Buy rating. At a share price of around $40.20, the upside potential based on a median price target of $52.00 is 29.4%. At the high price target of $65.00, the upside potential is about 61.7%.
Analysts are expecting second-quarter revenue to total $18.78 billion. That would be up 10.3% sequentially and essentially flat year over year. Adjusted EPS are forecast at $1.09, up 33.3% sequentially and down 10.7% year over year. For the full 2022 fiscal year, EPS are forecast to slip by 17.5% to $4.02, down 17.5%, and revenue is expected to decline by 6.6% to $73.28 billion.
Wells Fargo stock trades at 10.0 times expected 2022 EPS, 7.7 times estimated 2023 earnings of $5.20 and 6.7 times estimated 2024 earnings of $5.98. The stock’s 52-week range is $36.54 to $60.30. Wells Fargo pays an annual dividend of $4.20 (yield of 2.9%) and total shareholder return for the past 12 months is negative 13.1%.
Originally posted at 24/7 Wall St.
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