1Y TARGET: $427 --> $405
POTENTIAL UPSIDE: +56% β
"This scenario implies a positive outlook but lower than before long term margin, conservative PE and higher discount rate to reflect current uncertainty"
ASSUMPTIONS:
LTM Revenue: $422.818B
5Y Revenue CAGR: 7%
2030 Profit Margin: 5.5% --> 5%
2030 PE Ratio: 17
Shares outstanding: 0.910B
Shares reduction: 2%/year
VALUATION:
Q2 2030 $UNH SHARE PRICE =
422.818 * (1.07)^5 * 0.05 * 17 /
[0.910 * (0.98^5)] = $613
You can now choose the discount rate that you prefer, for Unitedhealthcare I want to use 11%.
ACTUAL PRICE: $260
FAIR VALUE: $364
PRICE TARGET (1Y): $405
POTENTIAL UPSIDE: +56%
EXPECTED RETURNS: 18.7%/year
DIVIDEND YIELD: 3.4%
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