Universal Health Services (NYSE:UHS) Shares Gap Down - Should You Sell?

Key Points

• Universal Health Services opened sharply lower, gapping down from $152.77 to $145.00 before the market open and last trading around $145.39.
• Recent analyst actions have turned more cautious, with several firms cutting price targets or downgrading the stock; the consensus rating is now Hold with an average target price of $212.94.
• The company beat its latest quarterly earnings and revenue estimates, but the stock still trades well below its 50-day and 200-day moving averages, even as it continues paying a small dividend.

Universal Health Services, Inc. (NYSE:UHS - Get Free Report) gapped down before the market opened on Tuesday . The stock had previously closed at $152.77, but opened at $145.00. Universal Health Services shares last traded at $145.3870, with a volume of 208,091 shares traded.

Analysts Set New Price Targets

UHS has been the subject of a number of recent research reports. TD Cowen lowered their target price on Universal Health Services from $230.00 to $197.00 and set a "buy" rating for the company in a research note on Monday, June 22nd. Barclays lowered shares of Universal Health Services from an "overweight" rating to an "equal weight" rating and set a $179.00 target price on the stock. in a research note on Wednesday, July 8th. Raymond James Financial cut Universal Health Services from an "outperform" rating to a "market perform" rating in a research note on Wednesday, April 29th. Guggenheim decreased their target price on shares of Universal Health Services from $238.00 to $211.00 and set a "buy" rating for the company in a research note on Wednesday, April 29th. Finally, JPMorgan Chase & Co. lowered their price target on Universal Health Services from $235.00 to $205.00 and set a "neutral" rating for the company in a research report on Wednesday, May 20th. Five equities research analysts have rated the stock with a Buy rating, twelve have given a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat, the stock currently has an average rating of "Hold" and a consensus target price of $212.94.

Universal Health Services Stock Performance

The company has a quick ratio of 1.01, a current ratio of 1.08 and a debt-to-equity ratio of 0.52. The stock has a market capitalization of $8.77 billion, a P/E ratio of 6.03, a P/E/G ratio of 0.83 and a beta of 1.07. The business has a fifty day moving average price of $153.93 and a 200-day moving average price of $184.17.

Universal Health Services (NYSE:UHS - Get Free Report) last released its quarterly earnings data on Tuesday, April 28th. The health services provider reported $5.62 EPS for the quarter, topping the consensus estimate of $5.41 by $0.21. Universal Health Services had a return on equity of 19.57% and a net margin of 8.56%.The company had revenue of $4.50 billion during the quarter, compared to the consensus estimate of $4.39 billion. During the same period last year, the company earned $4.84 EPS. Universal Health Services's revenue for the quarter was up 9.6% on a year-over-year basis. On average, sell-side analysts expect that Universal Health Services, Inc. will post 23.47 EPS for the current year.

Universal Health Services Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Thursday, June 18th. Stockholders of record on Monday, June 8th were given a dividend of $0.20 per share. The ex-dividend date of this dividend was Monday, June 8th. This represents a $0.80 annualized dividend and a dividend yield of 0.6%. Universal Health Services's dividend payout ratio is presently 3.33%.

Hedge Funds Weigh In On Universal Health Services

A number of institutional investors and hedge funds have recently made changes to their positions in UHS. Elyxium Wealth LLC purchased a new stake in Universal Health Services during the fourth quarter valued at approximately $25,000. Harbor Capital Advisors Inc. purchased a new position in shares of Universal Health Services during the 4th quarter worth $26,000. Founders Capital Management purchased a new position in shares of Universal Health Services during the 4th quarter worth $28,000. Larson Financial Group LLC grew its position in shares of Universal Health Services by 302.9% during the 4th quarter. Larson Financial Group LLC now owns 141 shares of the health services provider's stock valued at $31,000 after acquiring an additional 106 shares during the period. Finally, CYBER HORNET ETFs LLC bought a new stake in shares of Universal Health Services during the 2nd quarter valued at $29,000. Hedge funds and other institutional investors own 86.05% of the company's stock.

About Universal Health Services

Universal Health Services, Inc NYSE: UHS is one of the largest diversified health care management companies in the United States, offering a broad spectrum of services through its acute care hospital and behavioral health segments. The company operates general acute care hospitals, surgical hospitals and ambulatory centers, as well as inpatient and outpatient behavioral health facilities. Its network provides emergency and specialized medicine, diagnostic imaging, laboratory services, advanced surgical care and rehabilitation, complemented by a comprehensive array of behavioral services including psychiatric treatment, addiction programs and developmental disabilities care.

In the acute care segment, UHS's facilities deliver services ranging from emergency department treatment and intensive care to maternity care and outpatient surgery.

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