Encompass Health Corporation EHC recently announced an expansion of its relationship with Piedmont in a bid to include Walton Rehabilitation Hospital, Augusta, GA, in its existing joint venture (JV) agreement. Piedmont is the largest healthcare system in Georgia and has been a long-time partner for Encompass Health.
The 70-bed inpatient hospital in Augusta, GA, will aid patients in recovering from amputations, brain injuries, complex orthopedic conditions, spinal cord injuries, and strokes and regain function. Patients will receive at least three hours of intensive therapy five days a week, along with whole-day nursing care and frequent physician visits. These services, when combined with Piedmont’s local acute care services, bode well for the patients.
The move is expected to solidify Encompass Health’s partnership with Piedmont, which includes several other JV rehabilitation hospital locations. EHC currently has 163 inpatient rehabilitation hospitals in 37 states and Puerto Rico. This expanded partnership with Piedmont will aid the company in expanding its footprint in Georgia. EHC and Piedmont are also expected to build hospitals in Loganville and Athens, GA.
The company is doing well on its expansionary goal front. The demand for inpatient rehabilitation services is rising continuously due to the underserved and aging of the U.S. population. A few days ago, it announced the opening of Baptist Health Rehabilitation Hospital at 1800 Bluegrass Parkway in Louisville, Kentucky. The 40-bed inpatient rehabilitation facility is a JV between EHC and Baptist Health.
The company is expected to expand its capacity by adding six new hospitals (de novos) with a total of 280 beds and increasing the bed count in existing hospitals by 150. For the 2023-2027 period, the company has plans to open six to 10 new hospitals and add 80-120 beds each year. Hence, expansion initiatives like this should accelerate the pace of EHC toward achieving these goals.
Shares of Encompass Health have gained 26.2% in the past year compared with the industry’s 11.5% growth. EHC currently carries a Zacks Rank #3 (Hold).
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Stocks to Consider
Some better-ranked stocks in the Medical space are Sera Prognostics, Inc. SERA, Amedisys, Inc. AMED and Tenet Healthcare Corporation THC. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sera Prognostics’ earnings surpassed estimates in one of the last four quarters, matched the mark twice, and missed the mark once, the average surprise being 3.7%. The Zacks Consensus Estimate for SERA’s 2024 earnings indicates a 19% increase from the prior-year figure. The consensus mark for revenues implies an improvement of 14.4% from the prior-year tally.
Amedisys’s earnings outpaced estimates in two of the trailing four quarters and missed twice, the average surprise being 2.8%. The Zacks Consensus Estimate for AMED’s 2024 earnings and revenues indicates a rise of 6.3% and 4.2%, respectively, from the prior-year tally.
The bottom line of Tenet Healthcare outpaced estimates in each of the trailing four quarters, the average surprise being 56.5%. The Zacks Consensus Estimate for THC’s 2024 earnings indicates a rise of 24.6% from the prior-year tally. The consensus estimate for revenues is pegged at $20.3 billion for 2024.
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