UnitedHealth forecasts 2024 revenues that top expectations

By Eleanor Laise

Insurance industry bellwether says analyst estimates for next year's earnings are at top end of likely range

UnitedHealth Group Inc. shares (UNH) headed lower premarket on Wednesday as the healthcare services and insurance company provided its 2024 outlook.

The managed-care sector bellwether said it expects 2024 adjusted earnings per share in the range of $27.50 to $28.00, while the FactSet consensus was $27.91. The company sees 2024 revenues totaling $400 billion to $403 billion, ahead of the FactSet consensus of $394 billion. UnitedHealth also reiterated its long-term earnings per share growth target of 13% to 16%.

The outlook, released just ahead of UnitedHealth's annual investor conference Wednesday morning, is "a solid starting point," Oppenheimer analysts wrote in a research note, and in line with the company's previous comments. UnitedHealth said on its October earnings call that analysts' consensus estimate for 2024 earnings was likely near the top end of its initial outlook range.

Older adults catching up on surgeries and other healthcare services delayed during the pandemic have been a headwind for UnitedHealth and other major insurers. UnitedHealth said Wednesday that its 2024 medical-loss ratio, or the percentage of premium dollars spent on clinical services and quality improvement, is expected to be about 84%. The medical-loss ratio was 82.3% in the third quarter.

UnitedHealth said it expects its 2024 total Medicare Advantage enrollment to grow by about 450,000 to 550,000 people, although Medicaid enrollment is expected to shrink by about 100,000 to 200,000. Many people are now being removed from state Medicaid rolls due to the expiration of pandemic-related rules that helped maintain continuous coverage.

Analysts are also closely watching how the popularity of GLP-1 drugs such as Novo Nordisk's (NVO) Ozempic and Wegovy may impact UnitedHealth's bottom line. UnitedHealth has been struggling with the list prices on the medications, CEO Andrew Witty said in October during the company's third-quarter earnings call.

UnitedHealth shares fell more than 1% premarket on Wednesday and have gained about 2% in the year to date, while the S&P 500 SPX has gained 18.6%.

-Eleanor Laise

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11-29-23 0902ET

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