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Pennsylvania-based Universal Health Services, Inc. (UHS) owns and operates acute care hospitals and outpatient and behavioral health care facilities. Valued at a market cap of $12.5 billion, the company’s range of services includes general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services, and behavioral health services.
This healthcare company's shares have lagged behind the broader market over the past 52 weeks. UHS has gained 9.6% over this time frame, while the broader S&P 500 Index ($SPX) has soared 17.5%. Moreover, the stock is marginally up on a YTD basis, compared to SPX’s 1.3% gain during the same time frame.
Zooming in further, UHS has outpaced the Health Care Select Sector SPDR Fund’s (XLV) marginal rise over the past 52 weeks but has fallen behind XLV’s 7.5% return on a YTD basis.
On Feb. 26, UHS reported its Q4 earnings results and delivered a strong performance. Adjusted earnings surged by a massive 57.2% year-over-year to $4.92 per share, exceeding expectations by a notable margin of 17.4%. Revenue also saw solid growth, rising 11.1% from the prior-year quarter to $4.1 billion, beating consensus estimates by 3%. Both the company’s acute care and behavioral health segments experienced robust growth, driven by higher admissions and increased revenue per patient.
For the current fiscal year, ending in December, analysts expect Universal Health’s EPS to grow 5.8% year over year to $17.58. The company’s earnings surprise history is mixed. It topped the Wall Street estimates in three of the last four quarters while missing on another occasion.
Among the 17 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on nine “Strong Buy” and eight “Hold” ratings.
On Nov. 26, TD Cowen maintained a “Buy” rating on UHS but lowered its price target to $251, which indicates a 39.4% potential upside from the current levels.
The mean price target of $237.86 represents a 32.1% upside from Universal Health’s current price levels, while the Street-high price target of $274 suggests an upside potential of 52.1%.
On the date of publication, Neharika Jain 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.
