Buy Rating Affirmed for Encompass Health on Strong Growth and Strategic Management

Kevin Fischbeck, an analyst from Bank of America Securities, maintained the Buy rating on Encompass Health (EHC – Research Report). The associated price target remains the same with $95.00.

Kevin Fischbeck has given his Buy rating due to a combination of factors including Encompass Health’s strong volume growth and sound management of labor costs. The company’s leadership, as expressed during a conference, conveyed a bullish stance, expecting continuous volume growth which supports high single-digit revenue increases. Fischbeck’s confidence is further bolstered by Encompass Health’s strategic capacity expansions and its ability to differentiate its services, particularly during the challenging COVID period when they managed to serve all patients.
Additionally, Encompass Health’s adept handling of labor costs, evidenced by reduced nurse turnover and controlled wage growth, contribute to Fischbeck’s positive outlook. The company’s development pipeline, featuring both de novo facilities and bed expansions, promises sustained growth. Their joint venture structure is also seen as an advantage, fostering immediate referral boosts and future partnership opportunities. Stable rate expectations and a history of effectively responding to regulatory changes further solidify Fischbeck’s Buy rating for Encompass Health.

Fischbeck covers the Healthcare sector, focusing on stocks such as AMN Healthcare Services, Acadia Healthcare, and Humana. According to TipRanks, Fischbeck has an average return of 3.8% and a 62.63% success rate on recommended stocks.

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Encompass Health (EHC) Company Description:

Encompass Health Corp. engages in providing post-acute healthcare services. It operates through the following segments: Inpatient Rehabilitation and Home Health & Hospice. The Inpatient Rehabilitation segment operates inpatient rehabilitation hospitals that provides rehabilitative treatment and care to patients who are recovering from stroke and other neurological disorders, cardiac & pulmonary conditions, brain & spinal cord injuries, complex orthopedic conditions and amputations. The Home Health and Hospice segment provides Medicare-certified home nursing, specialized home care and in-home services. The company was founded by Richard M. Scrushy on February 22, 1984 and is headquartered in Birmingham, AL.