Universal Health Services: Strong Performance and Future Potential Drive Buy Rating Amid Growth and Margin Expansion

Universal Health (UHS – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst on May 1. Analyst Whit Mayo from Leerink Partners reiterated a Buy rating on the stock and has a $250.00 price target.

Whit Mayo’s rating is based on a combination of factors that highlight Universal Health’s strong performance and future potential. The company’s acute care segment showed impressive results, with revenue and pricing both increasing by approximately 2.5%, and a significant EBITDA growth of over 17%, accompanied by an improvement in margins. These positive trends are further supported by the recent approval of Nevada’s SDP, which is seen as a positive development after a period of halted program approvals.
In contrast, while the behavioral health segment experienced softer volumes, there was an acceleration towards the end of the quarter, which aligns with management’s optimistic full-year outlook. Despite the challenges, such as calendar headwinds and adverse weather conditions impacting patient day growth, the company remains confident in its growth trajectory. Mayo maintains his EBITDA forecasts for 2025 and 2026, with a price target of $250, reflecting themes of growth acceleration and margin expansion, reinforcing his Buy rating.

According to TipRanks, Mayo is a 4-star analyst with an average return of 2.5% and a 48.72% success rate. Mayo covers the Healthcare sector, focusing on stocks such as Encompass Health, Humana, and Pediatrix Medical Group.

In another report released on April 30, Guggenheim also maintained a Buy rating on the stock with a $212.00 price target.