UnitedHealth Group (UNH) PT Raised to $632 at Deutsche Bank

Deutsche Bank analyst George Hill raised the price target on UnitedHealth Group (NYSE: UNH) to $632.00 (from $562.00) while maintaining a Buy rating.

The analyst comments "Another Messy Quarter - UNH reported Q2 earnings that delivered a modest EPS beat vs the Street, but with the company increasing its exclusions from adjusted EPS. UNH reported revenue of $98.8B (+6.4%yoy) vs the Street's $98.7B. UNH reported an MLR of 85.1%, missing the Street's 84.5%. This figure includes a 25bps of impact from regulatory action in Chile and 40bps due to the suspension of some care management activities due to the cyberattack, which we believe was already considered in the Street's MLR estimate. Explaining the MLR miss, UNH called out Medicaid mix issues, provider coding intensity, MA utilization and overall member mix as MLR headwinds, in a quarter where seemingly everything went the wrong way, with UNH making substantial SG&A cuts (-$650mm y/y) to hit the earnings number. Despite the messy print, UNH shares traded up ~10% in the two sessions following the print as low expectations and investor positioning trumped the messy results."

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