On Thursday, Encompass Health Corp (NYSE:EHC) had its price target increased by Mizuho from $93.00 to $95.00. The firm maintained a Buy rating on the stock, following a robust earnings report for the first quarter of 2024. The announcement comes after Encompass Health delivered what was described as one of the strongest quarters in the company's history, surpassing expectations on multiple fronts.
The company's performance was highlighted by significant achievements across its operations, which prompted the firm to revise its adjusted EPS estimates upwards for the years 2024 through 2026. The analyst cited several factors contributing to the positive outlook, including solid fundamentals in the inpatient rehabilitation sector, ongoing improvements in labor trends, and a strategic focus on bed expansion and mergers and acquisitions.
The analyst's statement underscored the strength of Encompass Health's business model and the clarity of its future prospects. "Given the strong fundamentals in the inpatient rehabilitation business, continued improvement in labor trends, bed expansion strategy, and M&A, we continue to believe the visibility is strong for EHC," the analyst noted.
The raised price target to $95 reflects the analyst's confidence in Encompass Health's trajectory and its ability to sustain growth and profitability. The Buy rating is a reaffirmation of the firm's positive stance on the company's stock, signaling to investors the firm's continued endorsement of Encompass Health's market position and financial health.
InvestingPro Insights
Following Mizuho's recent endorsement of Encompass Health Corp (NYSE:EHC) with a raised price target and a Buy rating, InvestingPro metrics offer additional insights into the company's financial health and stock performance. With a market capitalization of $8.29 billion and a P/E ratio standing at 23.48, Encompass Health appears to be trading at a value reflective of its earnings. Notably, the company's P/E ratio adjusted for the last twelve months as of Q1 2024 is at an even more attractive 21.42, suggesting a favorable comparison to near-term earnings growth.
InvestingPro data also shows a solid revenue growth of 11.4% for the last twelve months as of Q1 2024, complementing the positive narrative established by the earnings report. Moreover, the stock has experienced a significant price uptick, with a 34.04% total return over the last six months, and is trading near its 52-week high, at 98.79% of the peak price. This aligns with the InvestingPro Tip that EHC generally trades with low price volatility, providing a degree of stability for investors.
For those looking to delve deeper into Encompass Health's market potential, additional InvestingPro Tips highlight the company's strong return over the last three months and a high return over the last decade. With analysts predicting profitability for the current year and a history of profitability over the past twelve months, these insights can help investors make informed decisions. To access more exclusive analysis and tips, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. There are 5 more InvestingPro Tips available for Encompass Health, offering a comprehensive understanding of the company's investment profile.
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