UnitedHealth Group Inc., with operations in Hartford, could beat its own earnings guidance for this year, The Associated Press said, citing a Leerink Swann analyst as he upgraded his investment rating on the health insurer’s stock.
Analyst Jason Gurda said in a research note Tuesday that the Minnetonka, Minn., insurer has had better-than-expected enrollment growth for commercial and Medicare Advantage insurance, and “stable to favorable” pricing and cost trends. Gurda boosted his rating on the stock to “outperform” from “market perform.”
He said in the note he sees “upside” to UnitedHealth’s earnings guidance of $2.90 to $3.10 per share.
Analysts surveyed by Thomson Reuters expect, on average, earnings of about $3.08 per share from the insurer.
UnitedHealth, the largest publicly traded health insurer based on revenue, is due to report its first quarter earnings April 20.
Gurda also said the risk from a 2011 requirement of minimum medical loss ratios — which measure the percentage of premiums an insurer spends on claims — should be manageable and reflected in the stock price.
Health insurance stocks experienced periods of volatility through most of 2009, as the economy bottomed out at the start of the year and then the debate over health insurance reform raised investor concern. But the stocks have largely stabilized this year, as health reform passed through Congress and was signed into law, eliminating uncertainty for investors.
Gurda said near-term industry trends appear favorable.
