Encompass Health’s Strong Q1 2025 Performance and Strategic Moves Justify Buy Rating

Whit Mayo, an analyst from Leerink Partners, reiterated the Buy rating on Encompass Health (EHC – Research Report). The associated price target remains the same with $120.00.

Whit Mayo has given his Buy rating due to a combination of factors including Encompass Health’s impressive financial performance in the first quarter of 2025. The company reported revenue and adjusted EBITDA figures that exceeded both Mayo’s estimates and consensus expectations, highlighting strong operational leverage and cash conversion. Additionally, the company’s adjusted earnings per share significantly surpassed projections, further reinforcing the positive outlook.
Furthermore, Encompass Health’s strategic moves, such as the appointment of a new COO, Patrick Tuer, who brings substantial operational experience, are viewed positively. The company’s modestly raised guidance for 2025, with increased revenue and EBITDA expectations, suggests continued growth momentum. These elements, combined with the company’s position in inelastic and non-discretionary healthcare services markets, contribute to Mayo’s optimistic view and Buy rating.

Based on the recent corporate insider activity of 88 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 EHC in relation to earlier this year.