Shares in UnitedHealth Group (NYSE: UNH), the US’s biggest health insurer, picked up steam in today’s trading session, a day after reporting robust second-quarter results.
Indeed, investors pushed the shares up 2% to US$254.83 in the early afternoon, making it the best performer on the Dow Jones Industrial average.
For the second quarter, UnitedHealth Group reported its earnings jumped 28% from last year to US$2.92bn. Excluding items, United Health earned US$3.14 per share, which whizzed past the consensus estimate on Wall Street of US$3.04.
The key driver behind UnitedHealth’s sizzling performance is Optum, its pharmacy benefit manager.
READ: UnitedHealthcare shares rise on increase in 1Q profit, earnings forecast
With an Outperform rating and a US$276 price target on the stock, Oppenheimer’s Michael Wiederhorn said the results were “largely in line with our estimates, as Optum continues to drive overall growth trends.”
Wiederhorn urged investors to buy in if shares fall. “Given that the stock has been so strong, some short-term profit-taking seems normal, but any sustained weakness would represent a compelling buying opportunity,” he concluded in a note to investors.
United Health is lifting its outlook and now expects adjusted earnings of US$12.50 to US$12.75 per share for the year, up from its previous penciled in figures of US$12.40 to US$12.65.