Encompass Health (NYSE:EHC) Shares Break Above 50-Day Moving Average - Here's What Happened

Key Points

• Encompass Health shares broke above their 50-day moving average, reaching $133.75 and last trading around $131.74, up 7.9%.
• Third-quarter results exceeded expectations: adjusted EPS was $1.52 versus consensus of $1.36, while revenue rose 8.9% year over year to $1.61 billion. Adjusted EBITDA climbed 15.5%, supported by higher discharges and revenue per discharge.
• Management raised 2026 adjusted EPS guidance to $6.23–$6.37, and analysts maintain a “Buy” consensus with an average price target of $149.67. However, recent insider sales—including transactions by the CEO and CFO—could temper investor enthusiasm.

Encompass Health Corporation (NYSE:EHC - Get Free Report) shares crossed above its fifty day moving average during trading on Thursday. The stock has a fifty day moving average of $122.58 and traded as high as $133.75. Encompass Health shares last traded at $131.7410, with a volume of 2,197,535 shares.

Encompass Health News Roundup

Here are the key news stories impacting Encompass Health this week:

• Positive Sentiment: Third-quarter adjusted earnings per share were $1.52, exceeding analyst expectations of $1.36–$1.38 and rising from $1.23 a year earlier. Revenue increased 8.9% year over year to $1.61 billion, slightly ahead of estimates. Encompass Health reports results for third quarter 2026
• Positive Sentiment: Adjusted EBITDA increased 15.5% to $346.6 million. Discharges rose 5.7%, same-store discharges grew 3.0%, and net patient revenue per discharge increased 4.0%, indicating broad operating momentum.
• Positive Sentiment: Management raised its full-year 2026 adjusted EPS guidance to $6.23–$6.37 from $6.02–$6.25. The higher forecast reinforces expectations for sustained earnings growth and was a key catalyst for the stock’s advance. Encompass Health climbs after Q3 results top expectations and guidance is raised
• Neutral Sentiment: Recent analyst price targets include $125 from TD Cowen and $140 from Barclays, with a reported median target of $132.50. The range suggests some upside potential but also indicates that valuation expectations are becoming important after the rally.
• Negative Sentiment: Insider trading data shows eight open-market sales and no purchases by company insiders over the past six months, including sales by the CEO and CFO. These transactions may temper investor enthusiasm, although they can also reflect scheduled or personal liquidity decisions.

Wall Street Analysts Forecast Growth

EHC has been the topic of several recent research reports. Barclays upped their price target on Encompass Health from $144.00 to $151.00 and gave the stock an "overweight" rating in a report on Thursday. Raymond James Financial set a $150.00 price objective on Encompass Health in a research report on Monday, September 28th. Weiss Ratings upgraded shares of Encompass Health from a "buy (b-)" rating to a "buy (b)" rating in a research note on Thursday, October 8th. Truist Financial raised their target price on shares of Encompass Health from $140.00 to $150.00 and gave the company a "buy" rating in a report on Friday, August 7th. Finally, UBS Group lifted their price target on shares of Encompass Health from $150.00 to $155.00 and gave the stock a "buy" rating in a research note on Friday, August 7th. One investment analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and one has given a Hold rating to the company. According to data from MarketBeat, the stock has an average rating of "Buy" and an average target price of $149.67.

Encompass Health Stock Up 7.9%

The stock has a market cap of $13.00 billion, a PE ratio of 20.58, a price-to-earnings-growth ratio of 2.47 and a beta of 0.74. The firm has a fifty day moving average of $122.58 and a 200 day moving average of $109.81. The company has a quick ratio of 1.19, a current ratio of 1.19 and a debt-to-equity ratio of 0.76.

Encompass Health (NYSE:EHC - Get Free Report) last posted its quarterly earnings results on Wednesday, October 28th. The company reported $1.52 earnings per share for the quarter, beating analysts' consensus estimates of $1.36 by $0.16. The company had revenue of $1.61 billion for the quarter, compared to analysts' expectations of $1.60 billion. Encompass Health had a return on equity of 18.62% and a net margin of 10.17%. Encompass Health's quarterly revenue was up 8.9% on a year-over-year basis. During the same period last year, the firm earned $1.23 earnings per share. On average, equities research analysts anticipate that Encompass Health Corporation will post 6.08 EPS for the current fiscal year.

Encompass Health Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, January 15th. Investors of record on Monday, January 4th will be paid a dividend of $0.21 per share. The ex-dividend date is Monday, January 4th. This represents a $0.84 annualized dividend and a yield of 0.6%. Encompass Health's payout ratio is presently 13.68%.

Insider Activity at Encompass Health

In related news, EVP John Darby sold 4,858 shares of the company's stock in a transaction that occurred on Monday, August 31st. The stock was sold at an average price of $121.09, for a total value of $588,255.22. Following the completion of the transaction, the executive vice president directly owned 75,041 shares of the company's stock, valued at $9,086,714.69. This represents a 6.08% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CEO Mark Tarr sold 173,148 shares of the stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $125.47, for a total transaction of $21,724,879.56. Following the completion of the transaction, the chief executive officer owned 267,814 shares in the company, valued at $33,602,622.58. This represents a 39.27% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 186,912 shares of company stock valued at $23,434,845. 1.80% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the stock. Transamerica Financial Advisors LLC acquired a new stake in shares of Encompass Health in the 2nd quarter worth $29,000. Persistent Asset Partners Ltd acquired a new position in shares of Encompass Health during the second quarter worth about $36,000. Toth Financial Advisory Corp acquired a new position in shares of Encompass Health during the third quarter worth about $38,000. Keating Financial Advisory Services Inc. purchased a new position in Encompass Health during the second quarter worth about $39,000. Finally, Assetmark Inc. raised its holdings in Encompass Health by 89.6% during the first quarter. Assetmark Inc. now owns 455 shares of the company's stock worth $44,000 after purchasing an additional 215 shares in the last quarter. 97.25% of the stock is owned by hedge funds and other institutional investors.

About Encompass Health

Encompass Health Corporation NYSE: EHC is a healthcare services company that operates inpatient rehabilitation hospitals in the United States and Puerto Rico. Its hospitals provide intensive rehabilitation to patients recovering from conditions such as stroke, brain and spinal cord injuries, neurological disorders, amputations, hip fractures and other serious illnesses or injuries.

The company's services typically include nursing care, physical therapy, occupational therapy, speech and language therapy, respiratory therapy and medical management.

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