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UnitedHealth (NYSE:UNH) is scheduled to release its earnings report on Thursday, April 17, 2025. Analysts anticipate earnings per share (EPS) of $7.29 on sales of $111.6 billion. This represents an increase from the prior-year quarter, which saw an EPS of $6.91 on sales of $99.8 billion. While the company’s revenue growth is expected to continue, driven by its Optum and UnitedHealthCare businesses, elevated medical costs are likely to exert pressure on its profitability.

For event-driven traders, understanding historical patterns around UNH’s earnings releases can be valuable. One approach involves analyzing historical odds and establishing a position before the earnings announcement. Another strategy focuses on the correlation between immediate and medium-term returns after the earnings are released, allowing for positioning based on the initial market reaction. Over the last five years, UNH’s stock has shown a nearly even split in post-earnings day-one returns, with 10 out of 19 instances resulting in positive returns. The median positive one-day return has been 4%, with a maximum gain of 7%. Therefore, while the outcome of the upcoming earnings and its impact on the stock price remains uncertain, historical data suggests a roughly 50/50 chance of a positive short-term reaction. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

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UnitedHealth’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 19 earnings data points recorded over the last five years, with 10 positive and 9 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 53% of the time.
• Notably, this percentage increases to 55% if we consider data for the last 3 years instead of 5.
• Median of the 10 positive returns = 4.0%, and median of the 9 negative returns = -2.7%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

UNH observed 1D, 5D, and 21D returns post earnings

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

UNH Correlation Between 1D, 5D and 21D Historical Returns

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.