Update shared on 21 Nov 2025
Fair value Increased 1.95%Analysts have raised their fair value estimate for Universal Health Services from $243.94 to $248.71. They cite improving EBITDA outlooks, strong demand trends, and above-consensus quarterly results as key drivers behind the upward revision.
Analyst Commentary
Recent Street Research highlights a mix of optimistic and cautious views on Universal Health Services following its most recent quarterly results. Price target revisions and changes in ratings reflect analysts' evolving perspectives on the company's performance, valuation, and growth outlook.
Bullish Takeaways- Bullish analysts have raised price targets for Universal Health Services, driven by improved EBITDA estimates and better-than-expected quarterly results.
- Strong demand trends, particularly in the core acute business, are prompting upward revisions to forward estimates and support the company's current valuation.
- The company is seen benefiting from solid execution. Performance has exceeded both internal guidance and market consensus forecasts.
- Favorable industry dynamics and easier year-over-year comparisons in future periods are cited as potential catalysts for further share price appreciation.
- Bearish analysts caution that Universal Health Services remains exposed to policy changes. These could disproportionately affect its core business.
- Some note that, despite upward estimate revisions, the company's underlying results in certain areas remain weak compared to peers.
- Concerns persist about the sustainability of enhanced exchange subsidies. Potential policy shifts pose downside risk to valuation models.
- Modest increases in admissions volume, especially within the behavioral segment, are viewed as necessary for a more significant re-rating of the stock's valuation.
What's in the News
- Universal Health Services raised its consolidated financial guidance for 2025 and now expects net revenues between $17.306 billion and $17.445 billion, an increase of 1.0% at the midpoint from previous estimates (Key Developments).
- The company announced a $1.5 billion increase to its equity buyback plan, bringing total authorization to $7.6 billion (Key Developments).
- Between July and October 2025, Universal Health Services repurchased 1,315,000 shares for $234.3 million. In total, 43.1 million shares have been bought back since 2014 (Key Developments).
- Universal Health Services was dropped from the FTSE All-World Index (USD) (Key Developments).
Valuation Changes
- The Fair Value Estimate has risen slightly, increasing from $243.94 to $248.71 per share.
- The Discount Rate has inched up from 6.78% to 6.96%, reflecting a minor increase in risk assumptions.
- Revenue Growth assumptions have improved marginally, moving from 4.24% to 4.25% annually.
- Net Profit Margin is now expected at 8.33%, up slightly from 8.32% in previous forecasts.
- Future P/E (Price-to-Earnings) ratio projections ticked higher, shifting from 10.02x to 10.44x.
Disclaimer
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