UBS Keeps Enhabit Neutral Rating, PT Down to $8.5 from $10

UBS Keeps Enhabit Neutral Rating, PT Down to $8.5 from $10

UBS has maintained a neutral rating on Enhabit Inc. (EHAB) but has revised its price target down to $8.5 from $10. The move comes following Enhabit's strong second-quarter (Q2) 2025 earnings report, which exceeded analysts' expectations [1].

Enhabit reported earnings per share (EPS) of $0.13, beating the forecast of $0.10 by 30%. Revenue also exceeded expectations, reaching $266.1 million against the projected $263.39 million. The stock responded positively, surging 15.07% to $7.15 following the announcement [1].

Key takeaways from the earnings report include significant growth in hospice revenue, up 19.4% year-over-year, and strong operational efficiency and cost management strategies. The company continues to face challenges such as CMS reimbursement pressures and an upcoming CEO transition [1].

For the full year, Enhabit projects revenue between $1.060 billion and $1.073 billion, with adjusted EBITDA guidance set at $104 million to $108 million. The company remains focused on operational efficiency and deleveraging its balance sheet [1].

The market reaction to Enhabit's earnings was positive, with the stock rising by 15.07% post-announcement. However, UBS analysts have highlighted potential risks, including CMS reimbursement pressures and the proposed 6.4% rate cut for 2026 home health services. Additionally, the upcoming CEO transition may create leadership uncertainty [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-enhabit-inc-q2-2025-earnings-beat-boosts-stock-15-93CH-4178050