Shares of Universal Health Services (UHS) gained in after-hours trading after the healthcare management company reported earnings for its second quarter of Fiscal Year 2024. Earnings per share came in at $4.31, which beat analysts’ consensus estimate of $3.30 per share. Sales increased by 10.1% year-over-year, with revenue hitting $3.91. This also beat analysts’ expectations by $50 million.
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In addition, UHS repurchased 373,000 shares for about $70 million (around $187 per share). On a year-to-date basis, it bought back 1.073 million shares, spending roughly $195.1 million (about $182 per share). The firm has regularly repurchased its shares in each of the most recent quarters (as demonstrated in the image below).
As a result of this commitment to buying back shares, UHS also increased its stock repurchase authorization by $1 billion. With this new approval, the company’s new buyback plan now has $1.228 billion remaining, and shares of Class B Common Stock can be repurchased on the open market or through private transactions.
Looking forward, management now expects revenue and adjusted earnings per share for FY 2024 to be in the ranges of $15.565 billion to $15.753 billion and $15.40 to $16.20, respectively. For reference, analysts were expecting $15.581 billion in revenue along with an adjusted EPS of $13.82.
Is UHS a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on UHS stock based on seven Buys, five Holds, and one Sell assigned in the past three months. After a 25% rally in its share price over the past year, the average UHS price target of $197.92 per share implies 6.43% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
