UHS

Universal Health Services Inc

Healthcare


Presented:04/11/2018
Price:$119.07
Cap:$11.30B
Current Price:$225.34
Cap:$15.03B

Presented

Date04/11/2018
Price$119.07
Market Cap$11.30B
Ent Value$14.79B
P/E Ratio15.25x
Book Value$52.95
Div Yield0.33%
Shares O/S94.91M
Ave Daily Vol807,889
Short IntN/A

Current

Price$225.34
Market Cap$15.03B
Universal Health Services, Inc. operates as a healthcare management company, which through its subsidiaries, owns and operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers, and radiation oncology centers. It operates through the Acute Care Hospital Services, Behavioral Health Care Services, and Other. The Other segment consists of centralized services such as information technology, purchasing, reimbursement, accounting and finance, taxation, legal, advertising, and design and construction. The company was founded by Alan B. Miller in 1978 and is headquartered in King of Prussia, PA.

Publicly traded companies mentioned herein: HCA Healthcare Inc (HCA), Universal Health Services Inc (UHS)

Highlights

The presenter is long shares of Universal Health Services (UHS), with the view that the potential for a growth inflection on the behavioral health side of the business in 2018 will drive upside. Behavioral health was just under 50% of total revenue in 2017, but represents roughly two thirds of EBITDA. Additionally, he thinks the extensive litigation overhang could be resolved by the end of the year. At $120, shares look cheap at 11x consensus 2019 EPS (and 10x 2020). He is forecasting $11 of EPS in 2019 and $12 in 2020 (60 and 50 cents ahead of the Street, respectively), and assuming the multiple can expand to 15x - 16x, he sees 40% - 50% upside potential over 12 - 18 months.

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Idea Discussion

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