UBS Raises Price Target on UnitedHealth Group (UNH) Following Investor Day
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UBS reiterated a Buy rating on UnitedHealth Group (NYSE: UNH), and raised the price target to $193.00 (from $180.00), following the company's investor day. UNH expects its Medicare Advantage enrollment to grow by 700-800K lives in 2017, a 19-22% Y/Y increase. UBS raised 2016 EPS estimates to $9.45 and 2017 EPS estimates to $10.70.
Analyst A.J. Rice commented, "UNH struck a very positive tone at its investor day. The 2017 adj EPS outlook of $9.30-$9.60 represents Y/Y growth of 16-20%. With respect to the Y/Y EPS tailwind, UNH highlighted roughly $0.25 tailwind from downsizing public exchanges and another $0.25 tailwind related to the HIF moratorium. The remaining $0.80-$1.10 of Y/Y EPS growth is due to the strong performance of the key underlying business. Separately, UNH expects its commercial medical cost trend of 5.5-6.5% in 2017, vs 6% in 2016."
Shares of UnitedHealth Group closed at $157.59 yesterday.
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