Universal Health warns of possible impact to annual results from Medicaid changes; Q3 revenue slightly beats

Overview

• US hospital operator's Q3 revenue rose 5.3%, slightly beating analyst expectations

• Q3 adjusted EPS fell year-over-year; no analyst consensus for EPS

• Company repurchased 1.35 mln shares for $242.1 mln in Q3

Outlook

• Company warns changes to Medicaid programs could materially impact 2026 results

• Company expects new Medicaid eligibility rules to reduce revenue and increase uncompensated care

• Company says higher interest rates could further impact future results and cash flow

Result Drivers

• HIGHER ACUTE CARE VOLUMES - Co said increased adjusted admissions and patient days at acute care hospitals drove revenue growth

• BEHAVIORAL HEALTH GROWTH - Co said higher admissions and patient days at behavioral health facilities contributed to revenue rise

• LOWER ACUTE CARE REVENUE PER PATIENT - Co said net revenue per adjusted admission and patient day fell at acute care hospitals

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 14 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the healthcare facilities & services peer group is "buy"

• Wall Street's median 12-month price target for Universal Health Services, Inc. is $195.50, about 5.3% above its October 26 closing price of $185.71

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 6 three months ago

Reuters Recommended Reads

• Oct 27 - HCA signals flat 2027 earnings as Medicaid payments drop; shares slide

• Oct 27 - Centene Q3 revenue tops estimates on Medicare growth

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)