UnitedHealth: Pent-Up Demand Returning to Providers Could Hurt Near-Term Medical Loss Ratios

At an investor conference, narrow-moat UnitedHealth made comments about surging demand for healthcare services in the second quarter that pushed down shares by a mid-single-digit percentage in after-hours trading, or even closer to our $462 fair value estimate. Management did not change its 2023 guidance though, and we suspect its Optum Health business may even benefit from increasing medical utilization, even as the medical insurance business feels pressure.