Universal Health Services, Inc. Just Recorded A 42% EPS Beat: Here's What Analysts Are Forecasting Next
Universal Health Services, Inc. (NYSE:UHS) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat both earnings and revenue forecasts, with revenue of US$2.9b, some 4.8% above estimates, and statutory earnings per share (EPS) coming in at US$2.82, 42% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Universal Health Services
Taking into account the latest results, the consensus forecast from Universal Health Services' ten analysts is for revenues of US$12.1b in 2021, which would reflect an okay 6.4% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 20% to US$10.19. In the lead-up to this report, the analysts had been modelling revenues of US$12.1b and earnings per share (EPS) of US$10.33 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$131. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Universal Health Services at US$145 per share, while the most bearish prices it at US$115. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Universal Health Services' growth to accelerate, with the forecast 6.4% growth ranking favourably alongside historical growth of 4.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.8% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Universal Health Services is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$131, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Universal Health Services analysts - going out to 2022, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Universal Health Services that you need to be mindful of.
This article by Simply Wall St is general in nature. 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.
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