- Fundamentally it's undervalued for the quality blue chip company. My detailed analysis is on the older post I made earlier this year. I have attached that as a reference.
- In my previous swing, I bought
UNH on a sell off @ 441 and sold @600 before earning as a de-risking strategy. I'm glad that it did work out.
- I'm happy thatUNH is again trading at a discount and with compressed Earning multiple. This time I am buying it even lower than where I bought last time i.e 441 and I was happy with that price average.
- Whereas I do believe thatUNH EPS is lowered but it is lowered slightly which doesn't warrant a big sell off like this.
- I wanted to wait further before entering but I can't stop myself from buying this nameUNH at a price where I believe it's very undervalued.
- Therefore, I have re-entered theUNH and added it to my portfolio . I will consider adding further if selling pressure continues because I don't want to time the bottom.
- But undecisive market and lumpy market, going with a defensive name like this is a no brainer.
- In my previous swing, I bought
UNH on a sell off @ 441 and sold @600 before earning as a de-risking strategy. I'm glad that it did work out. - I'm happy that
UNH is again trading at a discount and with compressed Earning multiple. This time I am buying it even lower than where I bought last time i.e 441 and I was happy with that price average. - Whereas I do believe that
UNH EPS is lowered but it is lowered slightly which doesn't warrant a big sell off like this. - I wanted to wait further before entering but I can't stop myself from buying this name
UNH at a price where I believe it's very undervalued. - Therefore, I have re-entered the
UNH and added it to my portfolio . I will consider adding further if selling pressure continues because I don't want to time the bottom. - But undecisive market and lumpy market, going with a defensive name like this is a no brainer.
Nota
Bought UNH today @ < $410Nota
In my previous swing of UNH I made roughly 37% over a period of 2 monthsNota
EPS growth is healthy double digit in mid teens. A fair forward p/e multiple for mid teen EPS growth should at least be 15 ( conservatively )Year | 2024 | 2025 | 2026 | 2027 | 2028
Fair Stock Price (w/ forward p/e = 15 ) | $236 | $423 | $481 | $552 | $616
However,
UNH is a blue chip company and has a moat. Therefore, Investors will be willing to pay forward p/e of 20 once negative news subside.
Year | 2024 | 2025 | 2026 | 2027 | 2028
Fair Stock Price (w/ forward p/e = 20 ) | $315 | $564 | $642 | $736 | $822.2
Nota
Fair value for UNH in 2025 is around 550-564 on a forward p/e for 20Nota
I saw the updated EPS after the company lowered earning estimates. So, here's my updated price levels. Idea is to buy stock close to fair value:-> Conservative base case estimates:
Year | 2025 | 2026 | 2027 | 2028
EPS | 26.36 | 30.2 | 34.47 | 41.74
Fair Stock Price (w/ forward p/e = 15 ) | $395 | $453 | $517 | $626
-> Base Case : Forward p/e 20 for a defensive name with a moat growing EPS at 15% yearly
Fair Stock Price (w/ forward p/e = 20 ) | $527 | $604 | $680 | $834
Nota
- Adding more UNH on this sell off @ 340 .- Guidances often gets pulled when looking for new CEO because it allows new CEO to set expectation.
- Buy the fear!
Nota
- UNH appointed long time CEO which led UNH through tough times and through GFC ( Great financial crisis )- Lot of negativity is priced in and even with all the doom & gloom end of the world this stock is at least worth $395 with forward p/e of 15 and it provides you dividend yield of 2.78% while you wait.
Nota
Based on management,EPS for FY 2025 reduced to 22.09 and FY 2026 reduced to 26.67
Revised conservative price target for
FY 2025, 15 x 22.09 = $331.35
Fy 2026, 15 x 26.67 = $400
Revised base price target for
FY 2025, 20 x 22.09 = $441.35
Fy 2026, 20 x 26.67 = $533
Nota
- CEO added 25 mil worth of stock which adds confidence in the company further!Nota
Director bought 1 mil worth of shares of UNH last weekNota
- CFO bought 5 million worth of shares of UNH today May 10, 2025Nota
Ideally, UNH should fill the gap @305 and @375Nota
- Filled the gap @305 .- Next target @ 375 , let the Shorts pile up which will add fuel to the fire so that
UNH can rocket even higher :)Nota
- This should trade more than $450 before the year end. Unwarranted sell off!Nota
- UNH is forming a base. Consolidation before spring action.
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