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'Full Potential' For UnitedHealth

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UnitedHealth Group Inc (NYSE: UNH) held a “small get together” on Tuesday, where CEO Stephen Hemsley set 10-year goals for the company to achieve its “full potential”, while highlighting the “complementary contributions” of profit and growth by UHC and Optum.

Jefferies’ David Windley maintained a Buy rating on the company,, while raising the price target from $168 to $182.

Full Potential

“Management sees more long-term value creation through marshaling the segments' combined strengths of data analytics, improved and modernized networks and benefit designs, direct care delivery, and consumer engagement,” Windley mentioned.

UnitedHealth elaborated that “full potential” would include a completely digital administrative and clinical system, “UNH's ubiquity in health care system administration” and UNH-owned care deliver being launched in every core market.

The integration and management of pharmacy within the benefit structure and greater international footprint and contribution are also part of achieving “full potential."

Strong Guidance

The company also provided robust EPS guidance, ahead of the estimate, partly driven by HIF benefit.

In addition, all Optum segments expected to generate double digit profit growth, with UHC targeting 22 percent growth.

“UNH's broad quality agenda and high and improving retention rates are not only correlated, but likely causated,” the analyst added.

Latest Ratings for UNH

Apr 2017Deutsche BankInitiates Coverage OnBuy
Feb 2017Cantor FitzgeraldInitiates Coverage OnOverweight
Jan 2017PiperJaffrayInitiates Coverage OnOverweight

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