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With a market cap of $12.3 billion, King of Prussia, Pennsylvania-based Universal Health Services, Inc. (UHS) is a leading healthcare management company. It operates a broad network of acute care hospitals, behavioral health centers, outpatient facilities, and surgical hospitals. Additionally, the company provides commercial health insurance and management services such as physician recruitment, marketing, and administrative support.
UHS is expected to announce its fiscal Q4 earnings results on Tuesday, Feb. 25. Ahead of this event, analysts expect the hospital and health facility operator to report a profit of $4.18 per share, up 33.6% from $3.13 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in three of the last four quarters while missing on another occasion. In Q3, UHS missed the consensus EPS estimate by 1.1%.
For fiscal 2024, analysts expect UHS to report an EPS of $15.92, up 51% from $10.54 in fiscal 2023.
Shares of UHS have gained 22.1% over the past 52 weeks, lagging behind the S&P 500 Index's ($SPX) 25.1% surge. But, the stock has outperformed the Health Care Select Sector SPDR Fund's (XLV) 1.5% rise over the same period.
Despite reporting better-than-expected Q3 revenue of nearly $4 billion, shares of UHS tumbled 9.8% the following day due to rising operating expenses. Salaries, wages, and benefits increased 7% to $1.9 billion, while total operating costs climbed 9.2% to $3.6 billion, putting pressure on profitability despite strong patient admission growth. Additionally, adjusted EPS of $3.71 missed the consensus estimate. Declining cash and cash equivalents, down 11.2% to $106.1 million as of Sept. 30, 2024, further weighed on market sentiment.
Analysts' consensus view on Universal Health’s stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 17 analysts covering the stock, eight recommend "Strong Buy" and nine suggest "Hold." This configuration is less bullish than three months ago, with 11 analysts suggesting a "Strong Buy."
As of writing, UHS is trading below the average analyst price target of $237.86.
