Last week, the latest quarterly financial results were released by Universal Health Services, Inc. (NYSE:UHS), a key milestone in the company's efforts to build a stronger business. Overall, the results look like reliable results. Revenues of $3.9b were in line with analysts' expectations, while Universal Health Services delivered a surprising result of $4.26 (statutory) earnings per share, 28% above expectations. Following these results, the analysts updated their earnings model, but it would be useful to know whether they think there has been a material change to the company's outlook, or if it is business as usual. We thought readers would be interested to see the analysts' latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Universal Health Services
Revenue and Revenue Growth
Taking into account the latest results, the current consensus from Universal Health Services' 16 analysts is for revenues of US$15.7b in 2024. This reflects a 4.4% increase on revenues over the last 12 months. Statutory earnings per share are forecast to increase 12% to US$15.71. Prior to the publication of this report, the analysts had been forecasting revenues of US$15.7b and earnings per share (EPS) of US$14.01 in 2024. While revenue estimates have actually remained unchanged, earnings per share expectations have been increased significantly, showing that the analysts are becoming more bullish following the latest results.
The consensus price target remained unchanged at $233, suggesting that the improved earnings outlook is not expected to have a long-term impact on shareholder value creation. However, that is not the only conclusion that can be drawn from this data. Some investors also like to consider the dispersion of estimates when evaluating analyst price targets. The most optimistic Universal Health Services analyst has a price target of $256 per share, while the most pessimistic has it at $189. Still, with the group of estimates being relatively close, analysts seem to be pretty confident in their valuation, suggesting either that Universal Health Services is an easy-to-predict business or that they are all using similar assumptions.
One way to get more context on these forecasts is to compare them to past performance, and to the performance of other industry peers. Analysts are certainly expecting Universal Health Services' growth to accelerate, with forecast growth of 9.0% per annum to the end of 2024 standing alongside a 6.2% per annum track record over the past five years. In comparison, our data suggests that other industry peers (with analyst coverage) are expected to grow their revenues at 6.8% per annum. While the growth outlook is brighter than in recent years, it's clear that analysts are expecting Universal Health Services to grow at a faster pace than the industry as a whole.
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Conclusion
Most importantly, the analysts raised their earnings per share estimates, suggesting that there's clearly more optimism around Universal Health Services following these results. Fortunately, the analysts also reaffirmed the revenue numbers, suggesting they're in line with expectations. Furthermore, our data suggests that revenue is expected to grow at a faster pace than the broader industry. The consensus price target remains stable at $233, with the latest estimates not enough to impact the target price.
With that in mind, we believe it's the long term trajectory of the business that's far more important for investors to consider. Simply Wall St has a wide range of analyst forecasts for Universal Health Services out to 2026, and you can see them free on our platform.
It's also worth noting that we've found 1 warning sign for Universal Health Services that you should take into consideration.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
