Universal Health Services, Inc. (NYSE:UHS) Just Reported And Analysts Have Been Lifting Their Price Targets

The annual results for Universal Health Services, Inc. (NYSE:UHS) were released last week, making it a good time to revisit its performance. It was a credible result overall, with revenues of US$14b and statutory earnings per share of US$10.23 both in line with analyst estimates, showing that Universal Health Services is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Universal Health Services

Taking into account the latest results, the consensus forecast from Universal Health Services' 14 analysts is for revenues of US$15.4b in 2024. This reflects a satisfactory 7.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 24% to US$13.19. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$15.0b and earnings per share (EPS) of US$11.94 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice gain to earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Universal Health Services 7.0% to US$174on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Universal Health Services, with the most bullish analyst valuing it at US$208 and the most bearish at US$140 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Universal Health Services' growth to accelerate, with the forecast 7.7% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Universal Health Services is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Universal Health Services' earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Universal Health Services going out to 2026, and you can see them free on our platform here.

Even so, be aware that Universal Health Services is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.