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Investing.com - Goldman Sachs has assumed coverage on Universal Health Services (NYSE:UHS), a $12.6 billion healthcare provider with a perfect Piotroski Score of 9 according to InvestingPro, with a Neutral rating and a price target of $219.00.
The investment bank’s analysis suggests the U.S. behavioral and mental health services market is entering the early stages of a multi-decade shift from inpatient psychiatric hospitals to non-inpatient care settings, including clinic-based, office-based, and virtual care environments. With a P/E ratio of 10.4 and strong revenue growth of 9.6% in the last twelve months, UHS appears well-positioned to navigate this transition.
Goldman Sachs forecasts that inpatient psychiatric volume growth will be lower than market expectations, projecting flat to 1% growth compared to industry expectations of 2% to 3% or higher. For UHS specifically, the firm models behavioral health same-facility inpatient admissions growing at an average annual rate of 0.5% from 2025.
The firm expects this volume pressure to create a downward bias to segment margins, with their segment EBITDA forecasts falling below consensus estimates during the forecast period.
Goldman Sachs notes that UHS management has acknowledged in public presentations that the non-inpatient market is gaining share of the overall U.S. behavioral market revenue, and the company is evaluating strategies to capture more revenue growth opportunities in non-inpatient behavioral services. With the next earnings report due on October 27, investors will be watching closely for updates on these strategic initiatives.
In other recent news, Universal Health Services has reported several significant developments. The company disclosed a $4.7 million verdict against its subsidiary, UHS of Delaware, Inc., in a Nevada lawsuit involving allegations of intentional interference with contractual relationships. Although the jury also imposed $500 million in punitive damages, these are expected to be reduced to approximately $14 million under Nevada statutory law, with potential further reductions based on recent Nevada Supreme Court precedents. On the financial front, Cantor Fitzgerald maintained its Neutral rating on Universal Health Services with a price target of $227, noting concerns about third-quarter growth expectations. UBS, however, reiterated a Buy rating and set a price target of $280, despite the recent legal setback. Additionally, Universal Health Services has appointed Darren Lehrich as Vice President of Investor Relations, a newly created role aimed at strengthening communication with investors. Lehrich brings experience from his previous roles at Help at Home and Magellan Health Inc. The company also observed an increase in nursing bonuses, with 50% of openings offering bonuses in September 2025, up from 41.9% in July 2025.
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