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Investing.com - Cantor Fitzgerald maintained its Neutral rating and $227.00 price target on Universal Health Services (NYSE:UHS) on Wednesday, citing a clearer pathway to EBITDA growth in 2026 versus 2025. According to InvestingPro data, UHS currently trades at an attractive P/E ratio of 8.42x and maintains a GREAT financial health score.
The research firm expressed increased optimism about UHS’s 2026 EBITDA growth prospects, highlighting a $50 million tailwind expected from Cedar Hill recovery. This recovery is anticipated to contribute $25 million in the second quarter of 2025 and another $25 million in the second half of 2025, building upon the company’s current EBITDA of $2.34 billion and impressive 9.73% revenue growth.
Cantor Fitzgerald also noted that the $1.2 billion Directed Payment Program (DPP) benefit in 2025 has the potential to remain flat rather than decline in 2026, excluding a possible tailwind from D.C. DPP approval. For deeper insights into UHS’s financial health and growth prospects, check out the comprehensive Pro Research Report available on InvestingPro.
The firm cautioned against excessive optimism regarding a potential fix to enhanced Health Insurance Exchange (HIX) subsidies, which are currently scheduled to expire.
Universal Health Services joins Tenet Healthcare (NYSE:THC) and HCA Healthcare (NYSE:HCA) in leaving the impact of the HIX subsidies expiration unsized in their outlooks, which Cantor noted contrasts with health insurance companies that are all assuming the subsidies will expire as current legislation indicates.
In other recent news, Universal Health Services reported its second-quarter 2025 earnings, surpassing expectations with an adjusted earnings per share of $5.35. This figure exceeded the forecasted $4.93, marking an 8.52% surprise. Revenue also outperformed projections, reaching $4.28 billion compared to the anticipated $4.24 billion. Furthermore, the company posted adjusted EBITDA that exceeded consensus estimates by 5%, despite a $25 million impact from its DC hospital operations during the quarter. In terms of analyst ratings, TD Cowen has maintained its Buy rating on Universal Health Services, with a price target of $226. These developments indicate continued positive momentum for the healthcare services provider.
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