Universal Health Services (NYSE:UHS) Shares Gap Down Following Weak Earnings

Universal Health Services, Inc. (NYSE:UHS)’s stock price gapped down before the market opened on Friday following a dissappointing earnings announcement. The stock had previously closed at $224.66, but opened at $208.00. Universal Health Services shares last traded at $207.18, with a volume of 277,375 shares traded.

The health services provider reported $3.71 earnings per share (EPS) for the quarter, missing the consensus estimate of $3.75 by ($0.04). Universal Health Services had a return on equity of 14.91% and a net margin of 6.22%. The firm had revenue of $3.96 billion during the quarter, compared to analysts’ expectations of $3.90 billion. During the same period in the prior year, the company earned $2.55 EPS. The firm’s quarterly revenue was up 11.3% compared to the same quarter last year.

Universal Health Services declared that its board has approved a stock buyback plan on Wednesday, July 24th that allows the company to buyback $1.00 billion in outstanding shares. This buyback authorization allows the health services provider to reacquire up to 8% of its shares through open market purchases. Shares buyback plans are often an indication that the company’s board believes its shares are undervalued.

Wall Street Analyst Weigh In

A number of equities analysts recently commented on the stock. Barclays lifted their target price on shares of Universal Health Services from $256.00 to $271.00 and gave the stock an “overweight” rating in a research report on Friday. KeyCorp began coverage on Universal Health Services in a research note on Friday, October 11th. They issued a “sector weight” rating for the company. Wells Fargo & Company raised their price target on Universal Health Services from $255.00 to $275.00 and gave the stock an “overweight” rating in a research report on Tuesday, October 22nd. Robert W. Baird boosted their price objective on Universal Health Services from $236.00 to $274.00 and gave the company an “outperform” rating in a research report on Wednesday, September 4th. Finally, Cantor Fitzgerald reissued a “neutral” rating and set a $219.00 price objective on shares of Universal Health Services in a research note on Friday. Five research analysts have rated the stock with a hold rating, nine have given a buy rating and two have given a strong buy rating to the company. According to MarketBeat, Universal Health Services has an average rating of “Moderate Buy” and an average target price of $232.46.

Insider Buying and Selling at Universal Health Services

In other news, Director Warren J. Nimetz sold 3,444 shares of the firm’s stock in a transaction dated Monday, August 12th. The shares were sold at an average price of $217.64, for a total value of $749,552.16. Following the completion of the sale, the director now directly owns 3,971 shares of the company’s stock, valued at approximately $864,248.44. This trade represents a 0.00 % decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. In other Universal Health Services news, Director Warren J. Nimetz sold 3,444 shares of the company’s stock in a transaction that occurred on Monday, August 12th. The stock was sold at an average price of $217.64, for a total transaction of $749,552.16. Following the transaction, the director now owns 3,971 shares in the company, valued at approximately $864,248.44. This represents a 0.00 % decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Nina Chen-Langenmayr sold 850 shares of the firm’s stock in a transaction that occurred on Wednesday, August 7th. The shares were sold at an average price of $212.11, for a total value of $180,293.50. Following the completion of the transaction, the director now owns 1,985 shares of the company’s stock, valued at approximately $421,038.35. The trade was a 0.00 % decrease in their position. The disclosure for this sale can be found here. Insiders own 16.10% of the company’s stock.

Institutional Trading of Universal Health Services

Hedge funds have recently modified their holdings of the business. Inspire Investing LLC purchased a new position in Universal Health Services during the 1st quarter valued at about $897,000. Ontario Teachers Pension Plan Board boosted its position in shares of Universal Health Services by 95.9% in the 1st quarter. Ontario Teachers Pension Plan Board now owns 19,511 shares of the health services provider’s stock worth $3,560,000 after purchasing an additional 9,549 shares in the last quarter. Nordea Investment Management AB boosted its position in shares of Universal Health Services by 27.9% in the 1st quarter. Nordea Investment Management AB now owns 65,643 shares of the health services provider’s stock worth $11,998,000 after purchasing an additional 14,326 shares in the last quarter. Susquehanna Fundamental Investments LLC purchased a new stake in shares of Universal Health Services in the 1st quarter worth approximately $738,000. Finally, Bessemer Group Inc. increased its position in Universal Health Services by 5,033.3% during the 1st quarter. Bessemer Group Inc. now owns 7,084 shares of the health services provider’s stock valued at $1,292,000 after buying an additional 6,946 shares in the last quarter. Institutional investors own 86.05% of the company’s stock.

Universal Health Services Stock Down 9.8 %

The company has a debt-to-equity ratio of 0.67, a current ratio of 1.28 and a quick ratio of 1.17. The stock has a 50 day simple moving average of $229.55 and a 200-day simple moving average of $201.02. The firm has a market cap of $13.57 billion, a PE ratio of 17.18, a PEG ratio of 0.77 and a beta of 1.27.

About Universal Health Services

Universal Health Services, Inc, through its subsidiaries, owns and operates acute care hospitals, and outpatient and behavioral health care facilities. It operates through Acute Care Hospital Services and Behavioral Health Care Services segments. The company's hospitals offer general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic and coronary care, pediatric services, pharmacy services, and/or behavioral health services.