Goldman Sachs Upgrades UnitedHealth Group to "Conviction Buy," Citing 2014 Earnings Growth Potential Due to Health Care Reform (UNH)

Goldman Sachs Upgrades UnitedHealth Group to “Conviction Buy,” Citing 2014 Earnings Growth Potential Due to Health Care Reform (UNH)


On Tuesday Goldman Sachs upgraded healthcare company UnitedHealth Group Inc. (UNH), citing an optimistic view of UNH’s growth potential in 2013 and 2014, even as the Affordable Care Act rolls out.

The firm upgraded UNH from “Hold” to “Conviction Buy” with a new price target of $66, up from $57. The new target suggests an 18% upside to Monday’s closing price of $55.75.

Goldman Sachs says even though 2013 operations are important for UnitedHealth, 2014 and the health reform implementation will be the be the driving factor for investors to flock to managed care stocks.

“For UNH, we see health reform implementation downside risk somewhat more ‘contained’ than we had previously, which is a key factor in our view of the attractive risk-reward profile at current valuation levels,” a Goldman analyst said.

UnitedHealth shares were up $1.34, or +2.40%, during morning trading on Tuesday. The stock is up +11.71 over the past year.

The Bottom Line
Shares of UNH have a dividend yield of 1.52% based on last night’s closing price of $55.75 and the stock’s annualized dividend payout of 85 cents per share.

UnitedHealth Group Inc. (UNH) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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