RBC Capital Markets has adjusted its outlook on Universal Health Services (NYSE: NYSE:UHS), increasing the stock's price target to $222 from the previous $189, while maintaining a Sector Perform rating.
The update comes after the company's management provided insights at a recent industry event. The revised 2024 estimates take into account an expected moderation in acute volume in the latter half of this year, which would be a shift from the challenging comparatives seen in late 2023.
Additionally, there is an anticipated rebound in behavioral patient day growth, projected to reach around 3% by year's end.
The analyst from RBC Capital highlighted the key drivers behind the updated target, stating, "Our revised 2024 estimates reflect moderating acute volume in the back half of this year off difficult late 2023 comps, as well as recovering behavioral patient day growth approaching ~3% toward the end of the year."
In other recent news, Universal Health Services has seen a series of positive adjustments from various financial firms. Baird has increased its price target for shares of Universal Health Services to $274, following the company's second-quarter results, which showcased a significant recovery in margins.
Mizuho Securities also raised the price target for Universal Health Services to $240, maintaining an Outperform rating, citing the company's robust earnings growth and margin expansion.
TD Cowen raised its price target for Universal Health Services to $220, following robust quarterly results. The firm highlighted potential new Service Delivery Programs in Tennessee and Washington D.C., which could significantly contribute to the company's revenue if approved.
BofA Securities increased its price target for Universal Health Services to $235, maintaining a Buy rating. The firm noted potential additional supplemental payments pending approval in Tennessee and the District of Columbia, which could significantly boost the company's financial outlook.
InvestingPro Insights
Universal Health Services (NYSE: UHS) has been a company of interest for investors, particularly with recent adjustments in stock price targets by RBC Capital Markets. To provide additional context, InvestingPro data and tips offer insightful metrics that could be useful for investors evaluating UHS's current market position.
InvestingPro data shows that UHS has a market capitalization of approximately $15.29 billion, with a P/E ratio of 16.6, reflecting a valuation that may appeal to value-oriented investors. The company's revenue growth in the last twelve months as of Q2 2024 stands at 8.83%, indicating a solid top-line expansion. Furthermore, UHS's strong return over the last three months, with a price total return of 22.3%, showcases a robust short-term performance that may catch the eye of momentum investors.
Among the InvestingPro Tips, two particularly standout points for UHS include the company's strategy of aggressive share buybacks and its sustained dividend payments for 22 consecutive years. These factors suggest a management team that is confident in the company's financial health and committed to returning value to shareholders. Additionally, the company's low price volatility could offer a degree of stability for investors in an otherwise uncertain market.
For those interested in a deeper dive, there are over ten additional InvestingPro Tips available, which provide further analysis and insights into UHS's financial health and market performance. These tips can be accessed through the InvestingPro platform, which includes a comprehensive suite of tools and data for investors.
As Universal Health Services continues to navigate the healthcare sector's challenges and opportunities, these InvestingPro insights could prove valuable for investors making informed decisions about the stock's potential.
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