Key Takeaways
- Universal Health Services shares fell 6% today after rival HCA Healthcare said its early read on 2027 points to earnings roughly in line with 2026.
- HCA beat third-quarter estimates but took a roughly $400 million hit from patients who lost exchange coverage, and it still sees 2027 earnings roughly flat.
- Analysts still expect Universal Health Services to grow normalized EPS about 6% in 2027, and that estimate now looks exposed.
- Universal Health Services reports after today’s close, and what it says about 2027 matters more than the quarter.
Universal Health Services (UHS) stock fell 6% today, hours before its own third-quarter report, after rival HCA Healthcare (HCA) gave investors an early look at 2027.
HCA’s 2027 Is the Problem
HCA’s quarter was solid. Adjusted EPS of $7.22 beat the $6.63 analysts expected, revenue rose 3.6% to $19.85 billion, and management now sees 2026 landing in the upper half of its guidance ranges.
The blemish was more uninsured patients, mostly people who lost coverage on the health insurance exchanges. HCA estimates that payer mix shift cut about $400 million from its pre-tax income in the quarter.
Then, on HCA’s third-quarter call, CEO Sam Hazen said that based on preliminary observations, he expects 2027 earnings to be “generally consistent” with 2026. He also expects net benefits from Medicaid supplemental payment programs to fall by $550 million to $650 million next year, against a 2026 total that included catch-up payments for earlier years.
HCA stock fell about 4%. The Street had been expecting much more than a flat year: consensus had HCA’s normalized EPS climbing about 8% in 2027:
UHS’s Estimates Look Exposed
HCA’s exchange problem comes from federal policy. Its release ties it to the expiration of the enhanced premium tax credits and to administrative reforms of the exchanges. The whole sector faces that, and the other hospital operators fell today too. The Medicaid figure is different. HCA’s $550 million to $650 million decline compares against 2026 payments that partly reimbursed services from earlier years, so that amount doesn’t transfer to UHS. UHS has its own exposure, though: it cited Medicaid reimbursement uncertainty when it lowered its 2026 outlook this summer.
TIKR Tracks 21 Analysts on Universal Health Services. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Universal Health Services, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Universal Health Services’ Analyst Ratings
Even so, analysts still expect UHS to keep growing:
That’s about 6% growth in normalized EPS in 2027, to $23.89. If the exchange losses hit UHS the way they hit HCA, that number could come down.
Universal Health Services Stock Was Already Cheap
UHS traded at 8.1x forward earnings at Monday’s close, well below its five-year average of 10.8x, and today’s drop takes it below 8x:
It bottomed at 5.9x as recently as June, so it can get cheaper still.
The selloff makes sense to me. HCA’s patients are still moving from exchange plans to no insurance at all, its early read on 2027 is flat, and UHS’s consensus still assumes growth. Under 8x already prices in a good chunk of that risk, but I’d want UHS’s own read on next year before buying.
UHS reports after today’s close, with its call at 8 a.m. ET Wednesday. If management sounds more like the Street than like HCA, today’s drop could reverse quickly.
So what is Universal Health Services stock actually worth?
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