Mizuho Securities analyst Ann Hynes has maintained their bullish stance on EHC stock, giving a Buy rating today.
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Ann Hynes has given her Buy rating due to a combination of factors influencing Encompass Health’s strong performance. The company reported impressive Q4:24 results, surpassing consensus adjusted EPS estimates by 14.7%. This was largely driven by a significant increase in same-store discharge growth, which was up 5.8% year-over-year. Furthermore, Encompass Health has provided optimistic 2025 guidance, suggesting high-single-digit growth in both adjusted EBITDA and revenue at the midpoint, bolstered by its market-leading inpatient rehabilitation business and strategic expansion initiatives.
Encompass Health’s operational trends further support this positive outlook, with adjusted EPS rising 23.2% year-over-year and adjusted EBITDA increasing 13.5% year-over-year, both exceeding expectations. The company’s revenue increased by 12% year-over-year, primarily due to strong discharge volumes. Additionally, the company’s strategic plans for 2025, including the addition of new facilities and bed expansions, are expected to contribute positively to its growth trajectory. Overall, these factors, combined with favorable pricing expectations and declining bad debt reserves, underpin Ann Hynes’s Buy rating for the stock.