U.S. markets closed
  • S&P 500

    3,825.33
    +39.95 (+1.06%)
     
  • Dow 30

    31,097.26
    +321.83 (+1.05%)
     
  • Nasdaq

    11,127.84
    +99.11 (+0.90%)
     
  • Russell 2000

    1,727.76
    +19.77 (+1.16%)
     
  • Crude Oil

    108.46
    +2.70 (+2.55%)
     
  • Gold

    1,812.90
    +5.60 (+0.31%)
     
  • Silver

    19.85
    -0.50 (-2.44%)
     
  • EUR/USD

    1.0426
    -0.0057 (-0.54%)
     
  • 10-Yr Bond

    2.8890
    -0.0830 (-2.79%)
     
  • GBP/USD

    1.2103
    -0.0072 (-0.59%)
     
  • USD/JPY

    135.1750
    -0.5530 (-0.41%)
     
  • BTC-USD

    19,124.45
    -95.84 (-0.50%)
     
  • CMC Crypto 200

    420.84
    +0.70 (+0.17%)
     
  • FTSE 100

    7,168.65
    -0.63 (-0.01%)
     
  • Nikkei 225

    25,935.62
    -457.42 (-1.73%)
     

Encompass Health (EHC) Forms JV With NCH Healthcare in Naples

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Encompass Health Corporation EHC recently announced plans to form a joint venture (JV) with not-for-profit, multi-facility healthcare alliance NCH Healthcare System to open and run an inpatient rehabilitation hospital in Naples, FL.

The move is anticipated to improve inpatient rehabilitation services in Naples. The 50-bed freestanding hospital, currently under construction at 14305 Collier Boulevard, is set to open in August 2022. Following the launch, NCH Healthcare is expected to move its NCH Brookdale Center for Healthy Aging & Rehabilitation, an existing 54-bed rehabilitation facility, to the new hospital.

The inpatient rehabilitation solution complements acute care services and helps patients restore functional abilities. NCH Healthcare’s board gave approval to invest in this JV. The move is expected to enhance quality and scope of inpatient rehabilitation services in the community. Entering into the JV is in line with Encompass Health’s strategy to focus on more profitable inpatient rehabilitation operations.

EHC is on its way to streamline its overall business through a spin-off of its home health and hospice business come Jul 1, 2022. Following the separation, Encompass Health will have a single reportable segment, which is inpatient rehabilitation. Its net operating revenues for 2022 are expected within $4,250-$4,300 million. This unit reported net operating revenues of $4,015 million in 2021. EHC expects to make 100-150 bed additions and 6-10 de novos per annum in the 2022-2026 period.

Following the spin-off, the new entity will be named Enhabit and have two reportable segments, namely home health and hospice. Management expects net service revenues of Enhabit within $1,080-$1,120 million for 2022.

Price Performance

Shares of Encompass Health have declined 30.4% in the past year compared with the 51.1% fall of the industry it belongs to.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank and Key Picks

Encompass Health currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical space are Select Medical Holdings Corporation SEM, Omega Therapeutics, Inc. OMGA and Progyny, Inc. PGNY, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Select Medical’s earnings is currently pegged at $2.19 per share. SEM has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.

Select Medical’s earnings beat estimates in each of the last four quarters, the average being 42%.

The Zacks Consensus Estimate for Omega Therapeutics’ earnings indicates a 28.9% increase from the prior-year reported number. OMGA has witnessed three upward estimate revisions and no downward movement in the past 60 days.

Omega Therapeutics’ earnings beat estimates twice in the last four quarters and missed the mark on the other two occasions.

The Zacks Consensus Estimate for Progyny’s 2022 bottom line has improved 4.5 times in the past 60 days. PGNY has witnessed three upward estimate revisions during the same time against none in the opposite direction.

Progyny’s earnings beat estimates in each of the last four quarters, the average being 169.7%.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research