UnitedHealth's adjusted earnings per share rose about 61% year over year in the third quarter of 2026, beating Wall Street expectations, while revenue also topped forecasts. Management raised full-year adjusted EPS guidance to at least $20.50, up from the previous range of $19.50 to $20.00. The improvement came mainly from more disciplined pricing and better medical cost control, with the medical care ratio falling to 88.4% from 89.9%. Optum Health's operating earnings reached $735 million, compared with $41 million a year earlier. The stock trades at a P/E of about 23, and 26 analysts give a consensus Strong Buy with targets between $380 and $529, though risks include membership declines, medical costs and stricter regulation.
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- UnitedHealth Group Incorporated Q3 2026 Earnings Call Summary
- UnitedHealth Group tops estimates, hikes profit outlook as insurer manages high medical costs
UnitedHealth Group reported third-quarter adjusted earnings of $4.69 per share, above the $4.14 analysts expected, and raised its fiscal 2026 adjusted earnings outlook to at least $20.50 per share from $19.50 to $20. Revenue reached $112.69 billion versus $111.40 billion expected. Its medical cost ratio came in at 88.4% against an expected 89.9%, but CFO Wayne DeVeydt said costs remain elevated versus historical norms, with the No Surprises Act dispute resolution process adding at least 1 percentage point. The company is shrinking membership, exiting unprofitable contracts, and investing in value-based care and AI, with acute hospital admissions down 15% and home health admissions up 10%. Net income was $4.11 billion, or $4.56 per share.
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UnitedHealth beat expectations in Q3, with revenue of $112.7 billion (versus $113.2 billion a year earlier and $111.4 billion expected) and adjusted EPS of $4.69 against Wall Street's $4.14 estimate. The company raised its full-year adjusted EPS guidance to at least $20.50, from the previous $19.50 to $20, helped by exiting unprofitable markets and investing in AI. The stock closed just over $401 last week and is up around 22% in 2026, though its five-year returns remain negative. The article says the forward P/E of around 16 is below the more than 19 times that the average S&P 500 stock trades at, and the 2.3% dividend yield adds appeal for income investors. It concludes UnitedHealth remains a worthwhile option given its modest valuation and improving earnings.
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UnitedHealth shares rose 4% to $395.19 after third-quarter 2026 adjusted EPS of $4.69 beat the $4.15 consensus, and management raised its full-year adjusted EPS outlook to at least $20.50. The medical care ratio improved to 88.4% from 89.9%, but this included $610 million of net favorable prior period reserve development, which the article notes may not repeat. Optum Health posted operating earnings of $735 million versus $41 million a year earlier after exiting value-based care markets, though its revenue fell 10%. Membership fell to 48.3 million from 50.1 million and total revenue dipped 0.4% to $112.69 billion, while Medicare Advantage enrollment has dropped by 935,000 since year-end 2025. Elevance Health and Humana each rose about 2%, and $5 billion in share buybacks through September 30 is cited as supporting the bull case.
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