July 2, 2018

UNH – Market expectations are for declining Uniform ROA, but management is confident about capital deployment, margins, and growth


  • UnitedHealth Group Incorporated (UNH:USA)currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 20.5x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, but management is confident about capital deployment, margins, and growth
  • Specifically, management is confident in their capital deployment, and that strong growth, coupled with excellent operating costs and productivity management, lifted Optum’s Q1 margin by 100bps over last year. Additionally, they are confident in the effectiveness of RallyCare, and in the portion of the national account selling season they have resolved so far. Furthermore, they are confident that they delivered well-balanced performance during the quarter, and that their diversification as a health care company should allow them to deliver consistent, balanced growth going forward

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