Universal Health Services: BofA Conference takes: ramp expected through the year

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Universal Health Services: BofA Conference takes: ramp expected through the year

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Universal Health Services

BofA Conference takes: ramp expected

through the year

Maintain Rating: UNDERPERFORM | PO: 215.00 USD | Price: 169.63 USD

Positive tone, expects ramp through the year 12 May 2026

We sat down with Darren Lehrich, VP, from Universal Health Services (UHS) at our Equity

Health Care Conference. Overall, the tone was positive as UHS sees Q1 issues as

Kevin Fischbeck, CFA

related to 1x items and expects results to trend back to normal through the year while Research Analyst

FL SDP approval will also be a larger tailwind in 2026 than expected. We reiterate BofAS +1 646 855 5948

Underperform given the legislative headwinds to insurance coverage and Medicaid rates. kevin.fischbeck@bofa.com

Joanna Gajuk

Research AnalystQ1 Core EBITDA down -3%, to recover through the year BofAS

Q1 came in better than consensus, but the stock was under pressure as the implied core +1 646 855 3961

EBITDA shrank (UHS bridged to down -3% excluding: 1) -$15m ACA headwind, 2) -$30m joanna.gajuk@bofa.com

weather/flu impact, 3) -$14m de novo drag, 4) -$5m CA staffing, 5) + $133m SDP Craig Jones Research Analyst

growth, and 6) +$2m M&A). Despite the implied steep ramp for the rest of the year to BofAS

get to the full year core growth of +5%. UHS is confident in normalization as it saw Q1 +1craig.jones3@bofa.com646 743 2020

largely in-line with its internal views and expects improvement from: 1) normalized Joaquin Arriagada Martinez

volumes (Q1 hit by flu and weather), 2) de novos ramp up, 3) behavioral volumes ramp up Research Analyst

BofAS

as UHS sees benefits of labor investments, 4) behavioral wage pressure moderates. +1 646 855 1654

joaquin.arriagadamartinez@bofa.com