Buy Universal Health Services (UHS) on Today's Weakness, Leerink Partners Says

Leerink Partners analyst Ana Gupte came out to defend Universal Health Services (NYSE: UHS) amid recent disclosures around DOJ False Claim investigations and a competitor downgrade, saying the weakness is a buying opportunity.

Gupte commented, "We caught up with CFO Steve Filton and only one facility is under investigation and there has been no impact on the underlying River Point Behavioral business during the investigation with no material impact on earnings. UHS has the most solid Balance Sheet and Cash flows within our coverage with a leverage ratio of Debt to EBITDA of 2.1x and CFO of $645MM. The stock reaction of 7% decline since the 8-K filing and exacerbated by the downgrade by a competitor offers an opportunity to buy on weakness, in our view."

The firm reiterated an Outperform rating and price target of $130.00

For an analyst ratings summary and ratings history on Universal Health Services click here. For more ratings news on Universal Health Services click here.

Shares of Universal Health Services closed at $117.71 yesterday.

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