Update shared on04 Sep 2025
Analysts maintained their price target for Universal Health Services at $218.31 as improving but still disappointing behavioral health volumes and ongoing start-up losses were offset by the benefits from Tennessee Medicaid expansion, resulting in no change to fair value.
Analyst Commentary
- Behavioral health volumes are showing improvement but remain below internal expectations.
- Expansion of Tennessee Medicaid directed payment program helped mitigate financial headwinds.
- Approximately $50M in start-up losses were reported for Cedar Hill Medical Center in Washington D.C.
- Ongoing softness in behavioral health volumes is a concern.
- Mixed analyst sentiment: Bullish analysts point to offsetting factors supporting higher price targets, while bearish analysts downgrade based on sustained volume and operating headwinds.
What's in the News
- Universal Health Services repurchased 875,000 shares (1.36% of shares outstanding) for $150.85 million between April 1 and June 30, 2025; total shares repurchased since 2014 now stand at 41.8 million (51.44% of shares) valued at $5.6 billion (Key Developments).
- The company raised its 2025 full-year net revenue guidance to a range of $17.096 billion to $17.312 billion, slightly up from the previous range (Key Developments).
- A new Senate bill would require hospitals to disclose their policies on care for extremely premature babies, with non-compliance leading to Medicaid funding ineligibility; Universal Health Services is among the publicly traded companies potentially impacted (Wall Street Journal).
- The bill was prompted by findings that some hospitals, including those in Universal Health Services’ peer group, do not provide certain care for preemies that is available at other institutions (Wall Street Journal).
- Industry scrutiny regarding neonatal care practices and hospital disclosure is increasing, which may affect Universal Health Services’ compliance policies and public perception (Wall Street Journal).
Valuation Changes
Summary of Valuation Changes for Universal Health Services
- The Consensus Analyst Price Target remained effectively unchanged, at $218.31.
- The Consensus Revenue Growth forecasts for Universal Health Services remained effectively unchanged, at 5.0% per annum.
- The Future P/E for Universal Health Services remained effectively unchanged, at 10.35x.
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