UHS Stock Forecast & Price Target

Universal Health Services Inc. has experienced notable financial growth, with the Acute Care Hospital Services segment achieving a same-store adjusted EBITDA margin expansion of 190 basis points to 15.8% and a revenue increase of 12.8%. The Behavioral Health Services segment also saw a growth in same-store revenue of 9.3%, with adjusted patient days rising 1.3% year-over-year, indicating a positive trend in patient demand and service utilization. Furthermore, anticipated benefits from pending CMS program approvals and the company's outlook for 2026 highlight strong pricing power and revenue growth prospects, further enhancing the positive outlook for the company's financial performance.

Universal Health Services Inc. faces a challenging financial outlook, attributed primarily to headwinds in volume and margin, leading to projected earnings about 5% below earlier estimates for FY26, along with an enterprise multiple reflecting trough levels. Projections indicate declining contributions from the behavioral health segment, with expected EBITDA impacts between $420 million and $470 million over the period from 2028 to 2032 as growth rates are revised downward. Additionally, risks such as potential regulatory changes, a high concentration in the Las Vegas market, and labor supply constraints may further hinder the company's profitability and operational efficiency.