馃┖ UNITEDHEALTH GROUP INCORPORATED: ANALYSIS 馃┖
Copyright: Joel Padilla 2023
UnitedHealth Group (UNH) is one of the smartest companies around. It owns health insurance, healthcare services, pharmacies and health data management. In addition, it has many of the hallmarks of any good company (good margins and ratios, controlled debt, controlled shares outstanding, aligned managers, and an oligopolistic/differentiated company).
Their Operating Margin (average) is ± 6%, the Net Income Margin (average) is ± 6% and the ROIC (average) is ± 15.5% last year. The last normalized EPS (14/04/23) was ± $21.95 USD. If the ROIC is applied as a measure of sensitivity to EPS, with PER 25 as the baseline, their price spread will be set between ± $466 USD and ± $631 USD.
On the other hand, there is strong sentiment of a future recession and this stock could be relatively resilient. However, if only is considered an increase of 9% in EBITDA, a net debt increases of 10% and an increase of the shares outstanding of 2%, their indifference price will be ± $540 USD (based on a EV/EBITDA 15).
The big problem may be that the Health Sector has been one of the most profitable last year. If this is a "safe" company, there would be no need to buy now until it may run out of steam in the coming months. In this sense, their critical levels are ± $458 USD and ± $393 USD (Forward PER ±20). The positive is that it has an increasing dividend policy.
The best analysis is yours!
Their Operating Margin (average) is ± 6%, the Net Income Margin (average) is ± 6% and the ROIC (average) is ± 15.5% last year. The last normalized EPS (14/04/23) was ± $21.95 USD. If the ROIC is applied as a measure of sensitivity to EPS, with PER 25 as the baseline, their price spread will be set between ± $466 USD and ± $631 USD.
On the other hand, there is strong sentiment of a future recession and this stock could be relatively resilient. However, if only is considered an increase of 9% in EBITDA, a net debt increases of 10% and an increase of the shares outstanding of 2%, their indifference price will be ± $540 USD (based on a EV/EBITDA 15).
The big problem may be that the Health Sector has been one of the most profitable last year. If this is a "safe" company, there would be no need to buy now until it may run out of steam in the coming months. In this sense, their critical levels are ± $458 USD and ± $393 USD (Forward PER ±20). The positive is that it has an increasing dividend policy.
The best analysis is yours!
Copyright: Joel Padilla 2023
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