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UnitedHealth Buys Change Healthcare; Street is Bullish

UnitedHealth Group will purchase Change Healthcare and merge it with its data and technology-enabled well being providers enterprise, Optum.

UnitedHealth (UNH) can pay Change Healthcare $25,75 per share in money, valuing the deal, which is anticipated to shut within the second half of 2021, at greater than $13 billion.

Because of the acquisition, United’s web earnings per share (EPS) is anticipated to develop by roughly $0.20 and adjusted EPS is ready to extend by $0.50 in 2022.

The mixture of the businesses will simplify providers round medical care to enhance well being outcomes and decrease prices by enhancing their providing of software program, information analytics, expertise and different providers to the healthcare business.

Howard Lance, Chairman of the Board of Administrators of Change Healthcare, mentioned, “We’re delighted to have in Optum a associate that shares a standard imaginative and prescient of making a greater future for well being take care of the individuals and communities we serve and see this mixture as in the most effective pursuits of all of our stakeholders.” (See UNH stock analysis on TipRanks)

Truist analyst David MacDonald reiterated his Purchase ranking on the inventory yesterday and raised his value goal from $400 to $420. This suggests upside potential of round 22%.

MacDonald expects the healthcare sector to profit from tailwinds associated to website of service redirection, additional acceleration in Worth-Based mostly Care, comparatively benign reimbursement, and a deal with built-in care supply. He believes that valuations in Healthcare Companies are enticing and is anticipating a rise in M&A exercise.

Consensus amongst analysts is a Robust Purchase based mostly on 17 Buys and 4 Holds. The typical price target of $387.63 means that UNH shares have upside potential of round 12% over the subsequent 12 months

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