(Reuters) -UnitedHealth Group on Tuesday forecast 2024 profit broadly in line with Wall Street expectations, indicating that medical costs are likely to remain elevated for the health insurance giant.
The healthcare sector has this year seen a recovery in demand, especially among older patients who started returning to doctors' clinics and hospitals for procedures they had delayed during the COVID-19 pandemic.
"Management's initial FY24 guidance ahead of tomorrow's investor day brings few surprises, with the print essentially in line with management's 3Q23 call commentary," RBC Capital Markets analyst Ben Hendrix said.
The company is likely to provide its outlook on medical costs on the investor day, analysts have said.
Focus will also be on the potential impact of biosimilars and newer GLP-1 drugs like Novo Nordisk (NYSE:NVO)'s Ozempic and Wegovy, and Eli Lilly (NYSE:LLY)'s Mounjaro and Zepbound, J.P. Morgan analyst Lisa Gill said in a note on Monday.
UnitedHealth (NYSE:UNH) and other health insurers have seen an increase in costs in 2023 due to the demand recovery, although in October it said levels of elective surgeries in the third quarter were more "stable" than in the second.
UnitedHealth had said it expected the upper end of its fiscal 2024 profit forecast to be in line with Wall Street estimates.
The company forecast 2024 adjusted profit of $27.50 to $28.00 per share, largely in line with analysts' average estimate of $27.90.
It forecast 2024 revenue in the range of $400 billion to $403 billion, higher than analysts' estimate of $395.77 billion.
For 2023, the company estimates adjusted earnings per share in the range of $24.85 to $25.00 compared to expectations of $24.95.