Encompass Health (EHC) Opens JV Hospital With Piedmont in Georgia
Encompass Health Corporation EHC recently announced the opening of the Rehabilitation Hospital of Columbus in Columbus, GA. This facility, which will operate through a joint venture (JV) between EHC and Piedmont, comprises 40 beds. Apart from this new JV, the company has plans to open another hospital with Piedmont in Athens, GA and has a hospital-in-hospital under construction.
This 40-bed inpatient rehabilitation unit is expected to serve patients with neurological disorders, strokes, brain and spinal cord injuries, amputations and orthopedic conditions. Along with full-day nursing care, different therapies will be provided in the hospital focused on restoring functioning ability.
This move bodes well with the company’s objective to bolster its competitive position and capture a better market share in a highly fragmented market. Encompass Health’s expanding rehabilitation hospitals’ network, leading to volume growth, is expected to boost its top line in the future.
The new hospital marks Encompass Health's 159th inpatient rehabilitation facility in the country. Apart from the recently inaugurated hospital, EHC has three other inpatient rehabilitation hospitals with Piedmont, Rehabilitation Hospital of Henry, Rehabilitation Hospital of Newnan and Regional Rehabilitation Hospital in Phenix City.
The company expects to meet the increasing needs of patients requiring rehabilitation services by having an active pipeline for de novo projects. It expects to open two de novos and add 31 beds to existing hospitals over the remainder of 2023. Encompass Health raised the 2023 guidance of net operating revenues in the range of $4,750-$4,810 million, the mid-point of which implies growth of 9.9% from the 2022 figure.
Price Performance
Shares of Encompass Health have gained 28.8% in the past six months compared with the 0.9% rise of the industry.
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Zacks Rank & Other Key Picks
Encompass Health currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the medical space are Atai Life Sciences N.V. ATAI, Select Medical Holdings Corporation SEM and HCA Healthcare, Inc. HCA. Each of these companies presently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Atai Life Sciences’ current-year earnings indicates a 16.3% improvement from the year-ago reported figure. It has witnessed four upward estimate revisions over the past week against no movement in the opposite direction. ATAI beat earnings estimates in two of the last four quarters, met once and missed on the other occasion.
The Zacks Consensus Estimate for Select Medical’s 2023 earnings indicates a 56.9% year-over-year increase to $1.93 per share. It has witnessed one upward estimate revision over the past month against no movement in the opposite direction. SEM beat earnings estimates in one of the last four quarters, met once and missed on the remaining occasions.
The Zacks Consensus Estimate for HCA Healthcare’s 2023 bottom line suggests a 9.1% increase from the prior-year levels. HCA has witnessed seven upward estimate revisions in the past 30 days against none in the opposite direction. It beat earnings estimates in three of the last four quarters and missed once.
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