Universal Health Services (NYSE:UHS) Shares Gap Up - Still a Buy?

Key Points

• Universal Health Services (NYSE:UHS) gapped up at the open, rising from a prior close of $151.27 to an opening price of $158.98 and trading as high as about $161.16.
• Analyst sentiment remains cautious: the stock has an average Hold rating, with 5 Buy ratings and 12 Hold ratings, and a consensus price target of $213.73.
• The company recently posted solid quarterly results, beating EPS and revenue estimates, and also announced a quarterly dividend of $0.20 per share, payable September 15.

Shares of Universal Health Services, Inc. (NYSE:UHS - Get Free Report) gapped up before the market opened on Friday . The stock had previously closed at $151.27, but opened at $158.98. Universal Health Services shares last traded at $161.1570, with a volume of 130,954 shares changing hands.

Analyst Upgrades and Downgrades

Several equities research analysts have commented on the company. Wall Street Zen lowered Universal Health Services from a "buy" rating to a "hold" rating in a research note on Saturday, May 2nd. Barclays lowered Universal Health Services from an "overweight" rating to an "equal weight" rating and set a $179.00 price objective on the stock. in a research note on Wednesday, July 8th. Deutsche Bank Aktiengesellschaft decreased their target price on Universal Health Services from $261.00 to $230.00 and set a "buy" rating for the company in a report on Wednesday, April 29th. TD Cowen dropped their target price on shares of Universal Health Services from $230.00 to $197.00 and set a "buy" rating for the company in a research report on Monday, June 22nd. Finally, Stephens cut their price target on shares of Universal Health Services from $235.00 to $205.00 and set an "equal weight" rating on the stock in a report on Wednesday, April 29th. Five research analysts have rated the stock with a Buy rating and twelve have issued a Hold rating to the company's stock. Based on data from MarketBeat, the company has an average rating of "Hold" and a consensus price target of $213.73.

Universal Health Services Price Performance

The company has a debt-to-equity ratio of 0.52, a current ratio of 1.08 and a quick ratio of 1.01. The firm has a market cap of $9.67 billion, a price-to-earnings ratio of 6.66, a P/E/G ratio of 0.80 and a beta of 1.07. The business's 50-day moving average price is $150.83 and its two-hundred day moving average price is $180.02.

Universal Health Services (NYSE:UHS - Get Free Report) last posted its quarterly earnings results on Tuesday, April 28th. The health services provider reported $5.62 earnings per share (EPS) for the quarter, beating the consensus estimate of $5.41 by $0.21. The firm had revenue of $4.50 billion for the quarter, compared to analysts' expectations of $4.39 billion. Universal Health Services had a net margin of 8.56% and a return on equity of 19.57%. The firm's quarterly revenue was up 9.6% on a year-over-year basis. During the same period in the prior year, the company posted $4.84 earnings per share. On average, research analysts forecast that Universal Health Services, Inc. will post 23.44 EPS for the current fiscal year.

Universal Health Services Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Tuesday, September 15th. Stockholders of record on Tuesday, September 1st will be issued a $0.20 dividend. This represents a $0.80 dividend on an annualized basis and a dividend yield of 0.5%. The ex-dividend date is Tuesday, September 1st. Universal Health Services's payout ratio is 3.33%.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of UHS. Wedge Capital Management L L P NC grew its position in shares of Universal Health Services by 13.1% during the 2nd quarter. Wedge Capital Management L L P NC now owns 48,425 shares of the health services provider's stock valued at $7,200,000 after buying an additional 5,624 shares during the last quarter. Handelsbanken Fonder AB lifted its holdings in Universal Health Services by 0.7% in the second quarter. Handelsbanken Fonder AB now owns 14,900 shares of the health services provider's stock worth $2,215,000 after acquiring an additional 100 shares during the last quarter. Hennion & Walsh Asset Management Inc. lifted its holdings in Universal Health Services by 69.2% in the second quarter. Hennion & Walsh Asset Management Inc. now owns 2,217 shares of the health services provider's stock worth $330,000 after acquiring an additional 907 shares during the last quarter. Chesley Taft & Associates LLC boosted its stake in Universal Health Services by 7.0% in the second quarter. Chesley Taft & Associates LLC now owns 2,402 shares of the health services provider's stock valued at $357,000 after acquiring an additional 157 shares during the period. Finally, Elevation Wealth Partners LLC boosted its stake in Universal Health Services by 503.1% in the second quarter. Elevation Wealth Partners LLC now owns 193 shares of the health services provider's stock valued at $29,000 after acquiring an additional 161 shares during the period. 86.05% of the stock is owned by institutional investors and hedge funds.

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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