Craig Hettenbach, an analyst from Morgan Stanley, maintained the Hold rating on Universal Health (UHS – Research Report). The associated price target is $200.00.
Craig Hettenbach’s rating is based on a combination of factors influencing Universal Health Services’ current and future performance. The company has a strong leadership position in the inpatient behavioral health sector, which is a significant profit driver, accounting for a substantial portion of its revenue and operating profit. However, there is uncertainty regarding potential government spending cuts, which could impact the company’s financial outlook in the near term.
In the longer term, Hettenbach points to the importance of improving profitability in the acute care business and monitoring pricing trends in the behavioral health segment. The company’s balance sheet is robust, with a net leverage of 1.9X, and steady free cash flow supports ongoing share buybacks. Despite these strengths, the stock has recently underperformed, and the risk/reward profile appears balanced. Hettenbach suggests that changes in government-funded programs could significantly influence the company’s future trajectory, warranting a Hold rating at this time.
In another report released on March 14, J.P. Morgan also maintained a Hold rating on the stock with a $215.00 price target.