Encompass Health beats Q1 adjusted EPS estimates, raises 2026 outlook

Overview

• US inpatient rehab operator's Q1 revenue rose 9% yr/yr

• Adjusted EPS for Q1 beat analyst expectations

• Company raised full-year 2026 guidance for revenue, adjusted EBITDA, and adjusted EPS

Outlook

• Encompass Health raises full-year 2026 net operating revenue guidance to $6.375-$6.470 bln

• Company lifts full-year 2026 adjusted EBITDA forecast to $1.350-$1.380 bln

• Encompass Health expects to open eight hospitals and add 175 beds to existing facilities in 2026

Result Drivers

• CAPACITY EXPANSION - Co said opening a new hospital and adding beds at existing facilities increased its ability to treat more patients

• PATIENT VOLUME - Co reported 4.3% increase in discharges, with same-store discharge growth of 1.6%

• HIGHER REVENUE PER DISCHARGE - Net patient revenue per discharge rose 3.7% yr/yr

Company press release: ID:nPn591ClPa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 12 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the healthcare facilities & services peer group is "buy."

• Wall Street's median 12-month price target for Encompass Health Corp is $145.00, about 41.3% above its April 29 closing price of $102.61

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 18 three months ago

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