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Universal Health Services, Inc. (UHS) is a prominent healthcare services provider based in King of Prussia, Pennsylvania. The company, valued at a market cap of almost $12 billion, operates a wide range of healthcare facilities, including acute care hospitals, behavioral health centers, and outpatient care services across the United States and the United Kingdom.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and Universal Health Services fits right into that category. As one of the largest for-profit healthcare systems in the U.S., it is known for its network of both general acute care hospitals and behavioral health facilities. The company's operations span across several divisions, with a substantial portion of its revenue coming from behavioral health, which has been a growth area for the company in recent years.
Despite its strengths, the company has declined 22.8% from its 52-week high of $243.25, achieved on Sep. 24. However, the company has demonstrated resilience, surging 4.1% over the past three months, outpacing the broader Dow Jones Industrial Average’s ($DOWI) 2.3% fall during the same time frame.
In the long run, UHS has managed a modest 3% gain over the past 52 weeks, lagging behind the $DOWI, which delivered a 5.5% return. Over the last six months, UHS has slipped 18.3%, underperforming the $DOWI’s marginal dip.
However, the stock has shown a spark of life, recently surging above its 50-day moving average after languishing below its 200-day moving average since early December, signaling a potential rebound.
Universal Health Services has underperformed the broader market over the past year, driven by concerns over ongoing Medicaid reimbursement changes and rising expenses, which have affected investor sentiment.
On Feb. 26, UHS released its fourth-quarter earnings, and its shares jumped 3.3% in the next trading session. It reported net revenues of $4.1 billion, marking an 11.1% increase from the same quarter the previous year and beating the consensus estimate. The adjusted net income was $4.92 per share, surpassing Wall Street’s expectations. Looking ahead, UHS projects consolidated net revenues between $17.02 billion and $17.36 billion for 2025. Diluted earnings per share are estimated to range from $18.45 to $19.95.
However, it has lagged behind its top rival, HCA Healthcare, Inc. (HCA), which gained 3.6% over the past 52 weeks and declined 14.3% over six months.
Despite Universal Health’s recent underperformance, analysts remain reasonably optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering it, and the mean price target of $231.53 suggests a 23.2% premium to its current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
