BofA Downgrades Universal Health Services (UHS) PT to $185, Underperform Rating, Due to "One Big Beautiful Bill" Concerns

Universal Health Services Inc. (NYSE:UHS) is one of the most profitable value stocks to buy according to analysts. On July 16, BofA downgraded Universal Health Services from Neutral to Underperform, while concurrently lowering its price target to $185 from $215. Analyst Joanna Gajuk cited the One Big Beautiful Bill as the primary reason for the downgrade and stated that the legislation poses a range of negative implications and creates downside risk to growth estimates for the healthcare sector.

BofA contends that the bill’s subsidy cuts to Medicaid and Affordable Care Act/ACA exchanges are not adequately reflected in current consensus estimates or stock prices for many companies. In Q1 2025, Universal Health Services achieved a net income per diluted share of $4.80, with an adjusted net income per diluted share of $4.84. In acute care hospitals, same-facility adjusted admissions increased by 2.4%, and same-facility net revenues rose by 5.0% in Q1.

However, the delays in receiving funds related to certain Medicaid supplemental payments also impacted cash flow. Behavioral health hospital patient days remained relatively flat compared to the prior year, which was also affected by weather and leap year impacts. The company acknowledges continued uncertainty in the external operating environment, particularly concerning Medicaid supplemental payments.

Universal Health Services Inc. (NYSE:UHS) owns and operates acute care hospitals and outpatient & behavioral health care facilities.

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Disclosure: None. This article is originally published at Insider Monkey.