US$174 - That's What Analysts Think Universal Health Services, Inc. (NYSE:UHS) Is Worth After These Results
Last week saw the newest full-year earnings release from Universal Health Services, Inc. (NYSE:UHS), an important milestone in the company's journey to build a stronger business. 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. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Universal Health Services after the latest results.
Check out our latest analysis for Universal Health Services
Taking into account the latest results, the most recent consensus for Universal Health Services from 14 analysts is for revenues of US$15.4b in 2024. If met, it would imply an okay 7.7% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 24% to US$13.19. In the lead-up to this report, the analysts had been modelling revenues of US$15.0b and earnings per share (EPS) of US$11.94 in 2024. So it seems there's been a definite increase in optimism about Universal Health Services' future following the latest results, with a decent improvement in the earnings per share forecasts 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. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Universal Health Services analyst has a price target of US$208 per share, while the most pessimistic values it at US$140. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Universal Health Services' rate of growth is expected to accelerate meaningfully, with the forecast 7.7% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.8% annually. Universal Health Services is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Universal Health Services following these results. 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Universal Health Services going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Universal Health Services , and understanding it should be part of your investment process.
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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.
