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Investing.com - KeyBanc maintained its Sector Weight rating on Universal Health Services (NYSE:UHS) following the company’s third-quarter earnings report, which exceeded expectations. The healthcare provider, currently trading near its 52-week high with a P/E ratio of 11.2, has received upward earnings revisions from 5 analysts for the upcoming period according to InvestingPro data.
The healthcare provider delivered an 11% EBITDA beat, primarily driven by Medicaid Supplemental Directed Payment upside in Washington, DC, and effective expense management in its Acute care segment, according to KeyBanc. With trailing twelve-month EBITDA reaching $2.41 billion and a perfect Piotroski Score of 9, UHS demonstrates robust financial health.
Excluding items not typically modeled by analysts—such as DC Supplemental Directed Payments, medical malpractice accruals, and an insurance settlement—the company’s underlying EBITDA would have exceeded expectations by approximately 5-6%.
Same-store patient volumes showed stability with slight improvement across both Acute and Behavioral health segments, with KeyBanc noting modest enhancements in surgical and emergency room trends within the Acute care division.
KeyBanc has updated its financial model to reflect the third-quarter results while maintaining its Sector Weight rating, with its revised projections assuming extended exchange Enhanced Premium Tax Credits.
In other recent news, Universal Health Services reported third-quarter earnings that significantly exceeded analyst expectations, leading to a positive market reaction. The company posted adjusted earnings of $5.69 per share, surpassing the analyst consensus of $4.84. Revenue increased by 13.4% to $4.5 billion, exceeding the expected $4.34 billion. This strong performance was partly due to a $90 million reimbursement from a Medicaid state-directed payment program in Washington, D.C. Following these results, Universal Health Services raised its full-year outlook. Mizuho maintained its Outperform rating on the company, with a price target of $242.00, noting that the third-quarter adjusted EBITDA exceeded consensus estimates by 9%. The rating reflects confidence in the company’s financial health and future prospects. These developments highlight the company’s strong revenue growth across its acute care and behavioral health segments.
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