UnitedHealth Group (UNH) shares soared 5.4% in the last trading session to close at $553.08. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.3% gain over the past four weeks.
UnitedHealth's 5.4% jump was fueled by the U.S. government’s decision to raise Medicare Advantage payment rates by 5.06% for 2026, more than double the initially proposed 2.23% hike. The move is expected to inject over $25 billion into the sector, offering much-needed relief amid rising medical costs. As one of the largest players in the space, UnitedHealth stands to benefit significantly from the higher reimbursements.
This largest U.S. health insurer is expected to post quarterly earnings of $7.27 per share in its upcoming report, which represents a year-over-year change of +5.2%. Revenues are expected to be $111.01 billion, up 11.2% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For UnitedHealth, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on UNH going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
UnitedHealth belongs to the Zacks Medical - HMOs industry. Another stock from the same industry, Cigna (CI), closed the last trading session 0.5% lower at $313.84. Over the past month, CI has returned -3.5%.
For Cigna
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UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Cigna Group (CI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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