Why Is Encompass Health (EHC) Stock Rocketing Higher Today

What Happened?

Shares of health care services provider Encompass Health (NYSE:EHC) jumped 11.9% in the morning session after the company reported strong fourth-quarter earnings and raised its profit forecast for the full year 2026. 

The healthcare provider announced fourth-quarter adjusted earnings of $1.46 per share, significantly beating the consensus estimate of $1.30. Revenue for the quarter rose 9.9% year on year to $1.54 billion, which met Wall Street's expectations. However, the key driver for the stock's move appeared to be the company's optimistic outlook. Encompass Health guided for full-year 2026 adjusted earnings per share of $5.96 at the midpoint, which surpassed analyst projections. This positive guidance, coupled with improved operating and free cash flow margins in the quarter, suggested strong underlying business health and boosted investor confidence.

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What Is The Market Telling Us

Encompass Health’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Encompass Health and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 10 months ago when the stock dropped 6% on the news that President Trump criticized the Federal Reserve's approach to interest rate cuts, warning that the pace was slow and could hinder economic growth. Trump's comments added pressure to an already sensitive market, raising concerns about political interference in monetary policy. Meanwhile, Fed Chair Jerome Powell maintained a cautious stance the previous week, highlighting the difficulty of balancing the dual mandate of steady employment and price stability amid the escalating trade tension. Investor sentiment was further dampened by the absence of constructive progress in trade negotiations, especially US-China relations which took a turn for the worse in the previous week. Overall, the outlook seemed more unclear heading into the first quarter 2025 earnings season, as a combination of hard to predict monetary policy and unresolved trade tensions weighed on business confidence.

Encompass Health is up 4.6% since the beginning of the year, but at $111.25 per share, it is still trading 12.5% below its 52-week high of $127.18 from October 2025. Investors who bought $1,000 worth of Encompass Health’s shares 5 years ago would now be looking at an investment worth $1,356.

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