Avidity Partners Management LP Trims Stock Holdings in Encompass Health Corporation $EHC

Key Points

• Avidity Partners Management LP cut its Encompass Health stake by 24.6% in the fourth quarter, selling 10,300 shares and leaving it with 31,600 shares worth about $3.35 million.
• Encompass Health reported stronger-than-expected quarterly results, posting EPS of $1.60 versus the $1.51 estimate and revenue of $1.59 billion, up 9% year over year.
• The company declared a quarterly dividend of $0.19 per share, while analysts remain broadly positive with an average Buy rating and consensus price target of $143.86.

Avidity Partners Management LP lowered its holdings in Encompass Health Corporation (NYSE:EHC - Free Report) by 24.6% in the fourth quarter, according to its most recent Form 13F filing with the SEC. The fund owned 31,600 shares of the company's stock after selling 10,300 shares during the period. Encompass Health comprises 1.0% of Avidity Partners Management LP's portfolio, making the stock its 22nd largest position. Avidity Partners Management LP's holdings in Encompass Health were worth $3,354,000 as of its most recent SEC filing.

A number of other institutional investors and hedge funds have also recently bought and sold shares of the business. Barclays PLC boosted its holdings in Encompass Health by 77.5% in the fourth quarter. Barclays PLC now owns 248,885 shares of the company's stock valued at $26,417,000 after purchasing an additional 108,669 shares during the last quarter. Arrowstreet Capital Limited Partnership boosted its holdings in Encompass Health by 9.0% in the fourth quarter. Arrowstreet Capital Limited Partnership now owns 1,163,834 shares of the company's stock valued at $123,529,000 after purchasing an additional 96,445 shares during the last quarter. Atlas Capital Advisors Inc. purchased a new position in Encompass Health in the fourth quarter valued at about $82,000. Aptus Capital Advisors LLC boosted its holdings in Encompass Health by 0.4% in the fourth quarter. Aptus Capital Advisors LLC now owns 126,675 shares of the company's stock valued at $13,445,000 after purchasing an additional 526 shares during the last quarter. Finally, FORA Capital LLC purchased a new position in Encompass Health in the fourth quarter valued at about $815,000. Hedge funds and other institutional investors own 97.25% of the company's stock.

Encompass Health Trading Down 0.9%

Shares of NYSE EHC opened at $101.49 on Friday. The stock's 50 day moving average price is $104.31 and its two-hundred day moving average price is $104.65. Encompass Health Corporation has a 52-week low of $92.77 and a 52-week high of $127.99. The stock has a market capitalization of $10.07 billion, a P/E ratio of 16.94, a PEG ratio of 2.21 and a beta of 0.72. The company has a quick ratio of 1.17, a current ratio of 1.17 and a debt-to-equity ratio of 0.76.

Encompass Health (NYSE:EHC - Get Free Report) last announced its quarterly earnings data on Thursday, April 30th. The company reported $1.60 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.51 by $0.09. Encompass Health had a return on equity of 18.28% and a net margin of 10.04%.The firm had revenue of $1.59 billion for the quarter, compared to analysts' expectations of $1.57 billion. During the same quarter in the prior year, the firm posted $1.37 earnings per share. Encompass Health's revenue for the quarter was up 9.0% compared to the same quarter last year. Encompass Health has set its FY 2026 guidance at 5.890-6.110 EPS. On average, analysts anticipate that Encompass Health Corporation will post 5.97 earnings per share for the current fiscal year.

Encompass Health Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Wednesday, July 15th. Stockholders of record on Wednesday, July 1st will be given a dividend of $0.19 per share. This represents a $0.76 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date is Wednesday, July 1st. Encompass Health's dividend payout ratio is presently 12.69%.

Analyst Ratings Changes

EHC has been the subject of a number of analyst reports. Leerink Partners set a $152.00 price target on Encompass Health in a report on Friday, May 22nd. Barclays reduced their price target on Encompass Health from $153.00 to $140.00 and set an "overweight" rating for the company in a report on Tuesday, May 5th. Wall Street Zen upgraded Encompass Health from a "hold" rating to a "buy" rating in a research note on Saturday, May 2nd. Weiss Ratings restated a "buy (b-)" rating on shares of Encompass Health in a research note on Monday, June 8th. Finally, TD Cowen started coverage on Encompass Health in a research note on Thursday, May 28th. They set a "buy" rating and a $125.00 price objective on the stock. One research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and one has issued a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of "Buy" and a consensus target price of $143.86.

Insider Buying and Selling at Encompass Health

In other news, EVP Patrick William Tuer sold 682 shares of the stock in a transaction that occurred on Monday, May 11th. The stock was sold at an average price of $104.56, for a total transaction of $71,309.92. Following the sale, the executive vice president directly owned 24,755 shares in the company, valued at approximately $2,588,382.80. This represents a 2.68% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Insiders own 1.80% of the company's stock.

Encompass Health Profile

Encompass Health Corporation is a leading provider of post‐acute healthcare services in the United States, operating a comprehensive network of inpatient rehabilitation hospitals and home health and hospice agencies. Its inpatient rehabilitation hospitals offer intensive therapy programs for patients recovering from conditions such as stroke, brain injury, spinal cord injury, cardiac and pulmonary disorders, and orthopedic procedures. Through its home health segment, Encompass Health delivers skilled nursing, physical therapy, occupational therapy and speech therapy to patients in the comfort of their homes, while its hospice services provide end‐of‐life care focused on symptom management and emotional support for patients and families.

Founded in 1984 as HealthSouth Corporation and rebranded as Encompass Health in 2018, the company has grown organically and through acquisitions to serve patients across more than 30 states.

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