UnitedHealth, CVS Shares Surge as Biden Leaps Ahead of Sanders After Super Tuesday

With Bernie Sanders falling behind Joe Biden in the race for the Democratic nomination for President, health insurance stocks are surging.
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U.S. health insurance stocks, including UnitedHealth Group  (UNH) - Get Report and  (CVS) - Get Report Health Corp., traded sharply higher Wednesday after a surge in support for Democratic candidate Joe Biden in Super Tuesday balloting.

Biden's resurgence, which included wins in nine of the sixteen states in play, highlighted by a surprise victory in Texas, puts the former Vice President in the driver's seat with a projected 453 of the party's 3.979 available delegates. 

That gives the moderate Biden a 70 delegate lead over leftist rival Bernie Sanders, who has specifically targeted healthcare managers such as UnitedHealth for alleged "greed" and vowed to replace them with so-called "Medicare for All" proposals if elected President.

“The wholesale disruption of American health care being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation’s health system, and limit the ability of clinicians to practice medicine at their best,” CEO Steve Wichmann told investors on an earnings call last year. “And the inherent cost burden would surely have a severe impact on the economy and jobs – all without fundamentally increasing access to care.”

UnitedHealth shares were marked 12% higher in early trading Wednesday to change hands at $293.20 each. CVS Health, which owns the Aetna health insurance business, was marked 5.8% higher at $66.13 each.

Healthcare benefits manager Anthem Inc  (ANTM) - Get Report was also on the move, rising 13.6% to $291.31 each.

UnitedHealth posted stronger-than-expected fourth quarter earnings in early January, and reiterated its full-year profit forecasts as Optum sales once again paced growth for the country's biggest managed care company. 

Looking into 2020, UnitedHealth said it sees full year adjusted earnings in the region of $16.25 to $16.55 per share, a figure it revealed at an investor conference in December.

Revenues at Optum, its pharmacy benefits management business, rose 8% to $29.8 billion while the division's bottom line rose 11.1% to $3 billion. OptumRx revenues were marked 6.8% higher at $74.3 billion for the full year, while OptumHealth sales surged 25.6% for the year to $30.3 billion.

CVS, for its part, said said adjusted fourth quarter earnings were pegged at $1.73 per share, down 19.1% from the same period last year but 5 cents ahead of the Street consensus forecast, as group revenues rose 22.9% as the group's healthcare benefits division saw sales surge to $17.15 billion as it added Aetna's operations to its legacy business.