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Encompass Health's (EHC) Future Hospital to Serve Pennsylvania

·4 min read

Encompass Health Corporation EHC recently announced plans to construct an inpatient rehabilitation hospital in Norristown, PA. The new hospital will be equipped with 50 beds and comprise private patient rooms, enhanced rehabilitation technologies, diversified amenities and well-versed medical teams.

By constructing the hospital in Pennsylvania, Encompass Health aims to extend advanced and customized rehabilitative care to the state’s residents nearby their home. This, in turn, is expected to ensure a speedy recovery of patients suffering debilitating illnesses and injuries, leading to better health outcomes throughout Pennsylvania.

The recent initiative marks a notable endeavor by Encompass Health to bolster its suite of rehabilitation services across Southeast Pennsylvania. Additionally, EHC’s footprint throughout the state will be strengthened by Norristown hospital’s presence in the region. With the hospital coming online in the near future, EHC’s total inpatient rehabilitation hospital count across the state will rise to 10.

Encompass Health, the leading U.S. rehabilitation hospital owner and operator, is on a nationwide expansion spree, announcing back-to-back facility launch plans. The announcements are followed by the inauguration of the facilities within the set target period. These efforts enabled EHC to build a robust healthcare portfolio of 152 inpatient rehabilitation hospitals to address the urgent need for facility-based post-acute care services across different U.S. regions.

Over the 2022-2026 period, Encompass Health anticipates adding 100-150 beds and opening 6-10 de novos, annually. Solid demand for high-quality rehabilitative care required to aid patients in returning to their normal daily activities makes the expansion plans of EHC aptly timed.

The expansion plans also reflect Encompass Health’s efforts to boost its Inpatient Rehabilitation segment’s revenues, which usually contribute the bulk of its overall revenues. In the first half of 2022, revenues of the segment increased 8.2% year over year, spurring EHC’s top-line growth of 5.8% year over year in the same time frame. For the ongoing year, the consolidated revenues are projected within $4,250-$4,300 million.

Shares of Encompass Health have lost 25% year to date compared with the industry’s decline of 27%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Encompass Health currently has a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Medical space are Elevance Health Inc. ELV, AMN Healthcare Services, Inc. AMN and Humana Inc. (HUM). While AMN Healthcare flaunts a Zacks Rank #1 (Strong Buy), Elevance Health and Humana carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Elevance Health’s earnings surpassed estimates in each of the last four quarters, the average being 4.33%. The Zacks Consensus Estimate for ELV’s 2022 earnings suggests an improvement of 10.9%, while the same for revenues indicates growth of 13% from the respective year-ago reported figures. The consensus mark for ELV’s 2022 earnings has moved 0.7% north in the past 60 days.

The bottom line of AMN Healthcare outpaced earnings in each of the trailing four quarters, the average being 15.66%. The Zacks Consensus Estimate for AMN’s 2022 earnings suggests an improvement of 40.2% from the year-ago reported figure. The same for revenues implies 28.5% growth from the year-ago reported figure. The consensus mark for AMN’s 2022 earnings has moved 8.2% north in the past 30 days.

Humana’s earnings beat estimates in each of the trailing four quarters, the average surprise being 9.09%. The Zacks Consensus Estimate for HUM’s 2022 earnings suggests an improvement of 20.4%, while the same for revenues indicates growth of 11.9% from the respective year-ago reported figures.  The consensus mark for HUM’s 2022 earnings has moved 0.7% north in the past 30 days.

Shares of Elevance Health and Humana have gained 4.9% and 4.4%, respectively, year to date. However, the AMN Healthcare stock has dropped 15.1% in the same time frame.


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