The reversal for UnitedHealth is underway. What is the target price for the future market?

Leading Companies in the US Medical Care Industry-- $UnitedHealth(UNH.US)$ The past year has just ended with a devastating crash.

On December 2, 2024, the Chief Executive Officer of the Company issued a statement, reflecting the public's concerns about other insurance practices, Bill Ackman issued a speech, adding to the lack of results and expectations of 2025Q1, leading to a continued slump in the share price, and the Market Cap evaporated by half.

After the arrival of the shuttle in Q2, Buffett announced UnitedHealth's Hold Positions. Based on the huge confidence in the market, the share price is on the verge of a rebound and welcome reversal.

What's more, will this rebound continue? How to Set a Target Price for Equipment? Let's analyze the latest Q3 results together!

Q3 full-year profit outperformed forecast, revenue above $113 billion, year-over-year growth of 12%, adjusted for EPS of $2.92, higher than forecast. Two Core Business SegmentsUnited Healthcareand Optum grew 16% and 8%, respectively.

Based on the relatively upbeat overall performance, the company raised its earnings forecast to at least $14.90 per share in 2025 and adjusted earnings per share to at least $16.25 per share, which looks like giving the market confidence to switch to a “recovery track” in a “crisis mode”.

In fact, UNH's revenue growth from 2022 to 2023 will be more than 12%, thanks largely to the company's unique Health Risks+Medical Services model, which enables the Insurance business to provide customers with defined coverage, which has helped Optum to manage its business through its extensive network and data analytics capabilities. With more precise pricing and control of medical costs, the Medical Pay Rate decreased to 81.6% in 2022Q3.

More importantly, operating profit is comparable to earnings growth, which is related to the continued improvement of Optum's business with higher profit margins and increased profitability with dynamic corporate profitability.

The company's full-year revenue performance in 2024 is primarily due to the accelerated growth in Medicare Advantage's number of participants, Medical fee increases and federal policy adjustments, and corporate governance and credibility considerations.

Based on UnitedHealthcare's membership growth and Optum's pharmacy business, revenue growth has been good since Q3 2025. Operating profit of $4.3 billion, adjusted EPS to $2.92, higher than expected $2.75, touched on the downside. Moreover, Q3 Medical Payout stood at 89.9%, compared to a year-on-year increase of 85.2%, although the outlook for Q2 management is exactly the same, so that the risk of cost loss has been controlled and the market's worst uncertainties are resolved.

Tool looks at two core businesses: UnitedHealthcare and Optum.

UnitedHealthCare primarily provides health insurance services to its members, including Employer and Individual Business, Federal Health Insurance and Reimbursement, Community and State Government Business, etc.

As a cornerstone of UNH's operations, the Insurance Business generated $87.1 billion in Q3, up 16% year-over-year, driven primarily by growth in Medicare and Medicaid members. Moreover, Q3 operating profit was only US$1.8 billion, down 57% year-on-year, driven by higher medical costs and reduced government health insurance funding.

Although short-term profits are under pressure, the number of its memberships has grown steadily, with domestic service consumers reaching 50.1 million and 0.795 million in the year, indicating that the demand for core insurance is strong.

Another major supporting business is Optum, which mainly includes the three major divisions OptumHealth, OptumInsight, OptumRx.

Other OptumHealth provides medical services through local medical and outpatient care systems, including primary care, specialist medical, emergency and surgical care, OptumInsight provides data analysis and research inquiries to hospitals, doctors, health insurance companies, governments, etc. Optum Rx provides multi-dollar Pharmacy Care Business.

Optum's revenue for the quarter was US$69.2 billion, up 8% year on year, driven primarily by the Optum Rx Business. Optum Rx recorded revenues of US$39.7 billion, up 16% year-on-year, while Optum Health and Tum Insight reported revenues of US$25.9 billion and US$49 billion, respectively, on a basic and year-over-year basis. Optum Rx's growth is driven by new customer service, existing customer expansion and pharmacy service growth.

In addition, Optum's operating profit was $2.5 billion in the quarter, compared with 58% of the company as a whole, and other diversified business models, which provide a soft spot for the insurance business, are key to unprofitable growth.

In terms of cash flow, Q3 operating cash flow was US$5.9 billion, corresponding to 58% year-on-year, compared to 2.36 per cent in net income, reflecting the health of UNH's financial condition, supporting Business Investment and Shareholder Reports.

Moreover, the company's current PE is 18.6, below the Industry average and only 11% above historical PE for the past five years. It is worth noting that the current market rate is lower than the historical level, which is a concern for investors.

THE BOTTOM LINE IS THAT Q3 PERFORMANCE WAS NOT BAD, RATHER THAN UPWARDS OF THE FULL-YEAR EPS GUIDANCE FOR 2025, RATHER A CLEAR VIEW OF MANAGEMENT'S CONFIDENCE IN THE RECOVERY. The risk that investors are concerned about is that without control of the Medical Loss Rate, the Company will drop below 89% next quarter, will be a strong signal of effective cost control and pressure from the regulatory side, the US Government's review of the Medicare Advantage business is progressing, and the result may be imprecise Limit the share price.

From a technical point of view, UNH's share price has entered a multi-pronged trend after a deep pullback since December 2024, and started a touch bottom-up in August this year. How can we change the resistance position and the Target Price?

We can use the Gold split line reference, using the circular class K-line diagram (reference below), the current stock price will reflect to the 38.2% key position of the Gold split line, forming the peripheral line class resistance. If the fruit continues to break the key position, the rule can show 50% key position (about $425 for the next target position. Outside of this, when combined with RSI, the RSI reference value is 50, so that it does not enter a sub-stage, and there is a continuous reflection scale.

Of course, any technical analysis is not universal, and the above analysis is only as an investment tutorial, not as an actual investment advice.

For risk-averse fellow investors, options tools can be scaled up.

If fellow investors see the UNH trend in the long term, the short-term wave of the stock price is reduced, the following three strategies can be adopted in the course of the expected upward move to lower Hold Positions, generate excess income or build a low cost warehouse.

One way is that when we have a valid UNH share, we can use a Covered Call, if we expect a small increase in the share price in a short period of time, and we can choose to Sell a zero value call to raise the share price to lower the share price.

Alternatively, if we do not own UNH shares, if we do not want to buy a stock at a low price, a short put is a suitable strategy. We can choose to Sell a low-value put, when the share price rises, or if the share price falls, transfer the option price.

If the stock price is hot and bullish ahead, you can use the Bull Call Spread strategy by choosing Buy Call A+Sell Call B, and Call A Option < Call B Option Price. Buy Call A using the expected time frame, correct the upside gain, and sell Call B to lower the cost of buying Call A.

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