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UnitedHealth Group is scheduled to release its first-quarter results before the opening bell Tuesday morning. Analysts expect the insurance company to report flat revenue and a slight decline in profits for the quarter.
Ahead of the announcement, traders are pricing in a potential sharp move in the stock. Based on recent options activity, UnitedHealth shares could swing as much as 6% in either direction by the end of the week, which—depending on the direction—could move the shares to roughly $344 or down to about $305 from Friday’s closing level.
UnitedHealth shares had fallen about 2% since the start of the year and nearly 30% over the last 12 months as the company navigated higher healthcare costs, federal investigations, and a sudden CEO change last May.
The stock received support earlier this month after the Centers for Medicare and Medicaid Services finalized its planned rate increase for next year. The increase was set at 2.5%, higher than expected, and is expected to result in about $13 billion in additional payments for insurers.
A strong first-quarter report could help lift UnitedHealth’s shares after a prolonged slump. The company has faced pressure from high healthcare costs, government scrutiny, and leadership changes.
Earlier this month, Raymond James upgraded its rating on UnitedHealth, describing the stock’s decline over the past year as an “attractive entry point.” The analysts said they see room for UnitedHealth to improve its margins by cutting costs.
For the first quarter, UnitedHealth Group’s revenue is projected at $109.81 billion, roughly flat year-over-year. Adjusted earnings per share are forecast at $6.55, down 9% compared with the same period a year ago, when a reduced outlook contributed to UnitedHealth stock’s worst day in decades.
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