5 Most Overvalued Companies According to the Media

4. UnitedHealth Group Incorporated (NYSE:UNH)

Flagged Overvalued by Number of Articles: 3

UnitedHealth Group Incorporated (NYSE:UNH) is a Minnetonka, Minnesota-based diversified healthcare and insurance company.

The stock is currently trading at an adjusted forward P/E multiple of 24.47x, representing a premium of 26.6% compared to the sector median adjusted forward P/E multiple of 19.33x and a premium of 22.1% against the company’s own five-year adjusted forward P/E. John Ransom at Raymond James believes that UnitedHealth Group Incorporated (NYSE:UNH) is carrying a growing risk-bearing business in the form of OptumHealth. The health services innovation company under the portfolio of UnitedHealth Group Incorporated (NYSE:UNH) is expected to be adversely impacted by negative outcomes in Medicare Advantage. The company could also face pressure due to rising medical costs due to a shortage of workforce and other factors.

Here’s what Stewart Asset Management said about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2022 investor letter:

“Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. UnitedHealth’s (NYSE:UNH) earnings were resilient. While it reported modestly down earnings in 2008, its earnings rebounded quickly to record highs in 2010 and the shares responded strongly in anticipation of this.”