Encompass Health (EHC) is strongly positioned in a robust demand environment with an underpenetrated patient population and high barriers to entry, Truist Securities said in a Friday note.
Analysts said the company is taking meaningful steps to expand capacity, including adding beds focused on high-occupancy markets, introducing small-format hospitals, and making ongoing investments in labor and technology.
Truist said that while unit closures impacted Q1 volumes, it expects improvements throughout the rest of the year.
Analysts said they are encouraged by Encompass's continued investments in data and analytics geared toward improving referral conversion and further enhancing the value proposition.
Truist has a buy rating on the stock and a $140 price target.
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