S&P Capital IQ Reiterates its BUY Rating on UnitedHealth Group, Target Price Reduced

October 19 00:00 2011

NEW YORK, October 19 (RainbowNewsLine.com) – Analyst Phillip Seligman of S&P Capital IQ reiterates his BUY rating on the shares of UnitedHealth Group (NYSE: UNH), while raising his estimates for the company. The target price has been reduced from $59 to $52.

Analyst Phillip Seligman, in a research note published yesterday mentions that the company reported its Q3 EPS ahead of the estimates due to lower medical loss ratio than expected that was supported by favorable reserve development. The analyst is optimistic on member gains and business service gain amid the tough economy. Under health reforms, the company will be able to do better than its peers given its diversity, scale and cash flow, the analyst says. Assuming no reserve development and utilization uptick in Q4, the 2011 EPS estimate has been raised from $4.40 to $ 4.45. The target price is reduced to reflect the peer valuation compression.