On Thursday, UBS maintained a Neutral rating on Universal Health Services (NYSE:UHS), but raised the stock price target to $177 from $152. This adjustment follows the company's fourth-quarter earnings, which surpassed consensus expectations by $8 million, partly due to $18 million in supplemental payments that were not factored into many estimates.
Universal Health Services reported an adjusted EBITDA of $473 million for the fourth quarter of 2023. The company's performance was slightly above market expectations, with the unexpected supplemental payments contributing to the positive results.
Looking forward to 2024, Universal Health Services has provided guidance suggesting that its adjusted EBITDA could grow by approximately 13.5% at the midpoint. This growth is anticipated to be primarily driven by new supplemental payment programs introduced in Nevada and Mississippi.
In response to the latest earnings report and the 2024 guidance, UBS has updated its price target for Universal Health Services' shares. The new target is based on an unchanged approximately 8.0x enterprise value to EBITDA (EV/EBITDA) multiple applied to the firm's short-term adjusted EBITDA estimate.
UBS has also revised its adjusted EBITDA estimates for Universal Health Services for the next two years. The 2024 estimate has been increased to $1,978 million from the previous $1,866 million, and the 2025 forecast has been adjusted to $2,077 million from $2,006 million. These updates account for the additional supplemental payments that Universal Health Services is expected to receive.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.