UnitedHealth Group Trading forecasts and signals

UnitedHealth (UNH) reported better than investors' expectations for the fourth quarter. The company's adjusted earnings per share were $4.48, beating consensus by 4.2%. Strong operating results are supported by a strong outlook for the current year.The company's revenue for October-December increased by 1.9% QoQ and by 12.6% YoY, reaching $73.74 billion, which was 1% higher than general market expectations.Revenue from the UnitedHealthcare segment increased by 12% YoY for the quarter and by 11% for the full year 2021. The number of clients served in the past year increased by 2.2 million, mainly due to an increase in the number of participants in the Medicare Advantage and Dual Special Needs programs by 900 thousand, the same trends were noted in relation to the Medicaid program. Revenues from the Optum direction increased by 14.6% YoY for the quarter and by 14.1% YoY for the year. The number of Optum customers in 2021 increased by 2 million, reaching 100 million. Revenue per customer for the year increased by 33% YoY, thanks to the modernization of the service delivery system, including home-based services in addition to online and offline services available in medical institutions. Optum Insight's revenue backlog for 2021 increased by $2.2 billion to $22.4 billion, including $100 million for October-December. Last year, the company signed a number of new contracts with healthcare institutions and expanded the range of services in the areas of payments, digital modernization and coordination of patient care.UnitedHealth's operating profit for the fourth quarter increased by 0.6% YoY to $5.54 billion. More than 60% of operating profit ($3.4 billion) was generated by the Optum segment. In 2021, operating profit amounted to $24 billion, half of which was provided by revenues from Optum, which remains the main driver of UnitedHealth's profit growth. The company's adjusted EPS increased by 13% YoY to $19.02. The MCR index for October-December increased by 0.7% QoQ and amounted to 83.7%, recovering to a normal level. We expect this indicator to continue growing in the current quarter due to the new wave of the COVID-19 epidemic at the beginning of the year in the United States.UnitedHealth management confirmed a positive forecast for 2022, published in November. This forecast includes revenue in the range of $317-320 billion (+10.2-11.2% YoY) with adjusted EPS within $21,1–21,6 (+10,9–13,6% YoY) and operating cash flow of $23-24 billion (+2.9-7.4% YoY).We evaluate the UnitedHealth report positively, we raise the target price to ...