Universal Health’s Strong Financial Performance Justifies Buy Rating Despite Revenue Shortfall

Leerink Partners analyst Whit Mayo has reiterated their bullish stance on UHS stock, giving a Buy rating yesterday.

Whit Mayo has given his Buy rating due to a combination of factors that highlight Universal Health’s strong financial performance. The company reported a 4% EBITDA beat, showcasing better margins and robust Acute operating results. Despite a slight shortfall in revenue estimates, the adjusted EBITDA exceeded consensus expectations by 4.4%, leading to an improvement in margins year-over-year.
Additionally, the Acute segment demonstrated a solid performance with a 2% beat against the model, driven by improved EBITDA margins and increased same-store revenue. Although the Behavioral segment experienced a decline in volume growth, it still managed to achieve revenue growth through pricing strategies. These factors collectively contribute to a positive outlook for Universal Health, justifying the Buy rating.

Mayo covers the Healthcare sector, focusing on stocks such as Pediatrix Medical Group, Encompass Health, and Humana. According to TipRanks, Mayo has an average return of 1.8% and a 46.09% success rate on recommended stocks.

In another report released yesterday, TD Cowen also maintained a Buy rating on the stock with a $226.00 price target.