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Pennsylvania-based Universal Health Services, Inc. (UHS) owns and operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers, and radiation oncology centers. With a market cap of $15.9 billion, Universal Health operates through Acute Care Hospital Services and Behavioral Health Care Services segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," Universal Health fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the medical care facilities industry. Along with the above-mentioned services, it also provides commercial health insurance and various management services.
Universal Health touched its all-time high of $241.95 on Sep. 6 and is now trading 1.6% below that peak. UHS gained 26.2% over the past three months, outpacing the S&P 500 Index’s ($SPX) 4.2% gains over the same time frame.
Over the longer term, UHS stock looks even more appealing. UHS is up 84.4% over the past 52 weeks and 56.1% in 2024, outperforming SPX’s 29.5% gains over the past year and 20% returns on a YTD basis.
To confirm the bullish trend, UHS has consistently traded above its 200-day moving average since mid-November 2023 and mostly above its 50-day moving average since early November 2023 with slight fluctuations.
Shares of Universal Health Services jumped a massive 10.2% after the release of its better-than-expected Q2 earnings results on Jul. 24. The company reported a robust 10.1% annual revenue growth to $3.9 billion, exceeding Wall Street’s topline expectations. It also demonstrated impressive efficiency by keeping expenses in check, leading to a 2.6% net margin expansion to 7.4%. This resulted in a 68.8% net income growth to $289.2 million.
Moreover, its adjusted EPS of $4.31 surpassed the consensus estimates by 27.9% while raising its full-year guidance for net revenues as well as adjusted EPS, bolstering investor confidence.
Universal Health’s competitor, Tenet Healthcare Corporation (THC), has gained 137.3% over the past year and 118.6% in 2024, outperforming UHS’ double-digit returns.
Among the 17 analysts covering the UHS stock, the consensus rating is a “Moderate Buy.” The mean price target of $240.60 suggests a potential upside of 1.1% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
