Earnings Outlook: UnitedHealth stock has bounced back after a rough first quarter. Will its positive streak continue?

It’s been a busy quarter for UnitedHealth Group Inc. UNH, +1.81%  

In June, UnitedHealth bought PatientsLikeMe, a startup that helps connect people with similar health conditions, and will become part of the insurer’s research operation. That same month, the company also agreed to buy health-care payments firm Equian LLC for about $3.2 billion, completed its acquisition of physician group DaVita and boosted its quarterly dividend by 20%.

All of this comes after the company‘s stock price suffered a big drop in April despite UnitedHealth delivering a solid first-quarter earnings beat and bright full-year outlook. At the time, analysts chalked the decline up to what they called the “Medicare-for-All overhang.”

Health-care companies began to see significant declines in shares shortly after Bernie Sanders unveiled his plan for a single-payer health-care system. Analysts insisted the probability of pushing through such a proposal was slim-to-none, but investors were nervous anyway, selling off not only shares in UnitedHealth and other health-services companies, but shares of biopharma companies as well.

Things have calmed down since then, with shares of UnitedHealth recovering to pre-April levels.

“Fundamentals have helped to offset political tensions with the insurance industry,” Jefferies health-care trading desk strategist Jared Holz wrote in an email to clients on Sunday. He thinks the company will beat Wall Street expectations for the second quarter.

But health stocks can get bumpy during election seasons, history shows, and there’s still some time between now and the next presidential election.

“How the stock reacts to continued Democratic candidate rhetoric on universal health care is another debate entirely,” Holz wrote.

Investors are keeping an eye on UnitedHealth’s earnings results, which often act as a bellwether for investor sentiment for the sector for rest of the season. Here’s what Wall Street expects from the insurer, which is scheduled to report second-quarter earnings next Thursday before the opening bell.

Earnings: Analysts expect UnitedHealth to report second-quarter earnings of $3.45 per share, a jump up from the $3.14 per share posted in the year-earlier period, according to FactSet. The software platform Estimize, which crowd-sources estimates from buy-side and sell-side analysts, hedge funds, academics and others, has the company earning $3.50 per share.

Revenue: Analysts polled by FactSet expect the company to report revenue of $60.523 billion, up from $56.086 billion in the year-earlier period. Estimize has UnitedHealth reporting $60.939 billion in sales.

Stock reaction: Shares of UnitedHealth, a Dow component, have lagged behind the broader market DJIA, +0.90% SPX, +0.46%  and the Health Care Select Sector SPDR Fund ETF this past year. The stock has fallen 0.5% in the year to date.

But FactSet analysts are bullish on the company, which has an average rating of buy. Twenty-five analysts have a buy or overweight rating on the stock, while only one has an underweight or sell rating.

The average price target for the stock is $285.54, according to FactSet. UnitedHealth shares were trading at around $248 on Wednesday afternoon.

W hat to look out for: Last quarter, UnitedHealth Chief Executive David Wichmann had strong words about Medicare for All.

“The wholesale disruption of American health care being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation’s health system, and limit the ability of clinicians to practice medicine at their best,” he said during an April call with analysts.

Investors will be interested in what Wichmann and the rest of the UnitedHealth management team think of the current health-policy climate, and how they plan to weather possible changes to the current health-care system.

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