Cautious Hold Rating on Universal Health Amid Mixed Segment Performance and Policy Risks

Bank of America Securities analyst Joanna Gajuk has reiterated their neutral stance on UHS stock, giving a Hold rating on April 14.

Joanna Gajuk’s rating is based on a combination of factors related to Universal Health’s financial performance and market conditions. The company showed strong performance in its Acute segment, with operating income surpassing expectations by 20%, driven by improved margins. However, the Psych segment faced challenges, with volumes turning negative and revenues falling short of expectations. This mixed performance across segments has led to a cautious outlook.
Additionally, there are potential risks from policy changes, such as the expiration of exchange subsidies and possible Medicaid cuts, which could impact future performance. Despite the strong EBITDA results, the lack of guidance from the company and the mixed revenue performance contribute to maintaining a Hold rating. The price objective remains unchanged at $215, reflecting the balance of positive and negative factors in the company’s outlook.

In another report released on April 14, Robert W. Baird also downgraded the stock to a Hold with a $224.00 price target.

Based on the recent corporate insider activity of 51 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of UHS in relation to earlier this year.