Leerink Partners analyst Whit Mayo reiterated a Buy rating on Encompass Health (EHC – Research Report) on February 11 and set a price target of $120.00.
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Whit Mayo’s rating is based on Encompass Health’s impressive financial performance in the fourth quarter of 2024, which showed robust growth in revenue, EBITDA, and adjusted EPS. The company’s discharge volume increased significantly, driven by strong same-store growth and contributions from new facilities. Revenue per discharge also improved, aided by a reduction in bad debt as a percentage of revenue.
Furthermore, Mayo acknowledges the favorable multi-year outlook for Encompass Health, supported by their strategic initiatives and limited exposure to Medicaid and Health Insurance Exchange risks. Despite some non-recurring items and headwinds anticipated for 2025, the company’s projected EBITDA growth remains strong, justifying the Buy rating and the slight increase in the price target to $120. This reflects the positive momentum and potential for earnings growth, aligning with the current market valuation.
According to TipRanks, Mayo is a 4-star analyst with an average return of 4.1% and a 48.24% success rate. Mayo covers the Healthcare sector, focusing on stocks such as HCA Healthcare, Pediatrix Medical Group, and Acadia Healthcare.
In another report released on February 10, RBC Capital also maintained a Buy rating on the stock with a $110.00 price target.