Deutsche Bank Upgrades Encompass Health Corp (EHC) to Buy on Compelling Risk/Reward

Deutsche Bank analyst Pito Chickering upgraded Encompass Health Corp (NYSE: EHC) from Hold to Buy with a price target of $104.00 (from $87.00).

The analyst commented, "We are upgrading EHC to Buy as our probability matrix points to a $104 price target and we believe the risk / reward at these levels favors a Buy rating. As we look back on the last 8 months for EHC’s stock, it's been a heartbreaker for many investors post the initial rally; the stock ran from $65 on 11/9/20 to $87 on 12/9/21 on the announcement of a strategic review and it has generally traded flat / down since then. Recently, investors have taken the announcement of Barbara Jacobsmeyer as the CEO of the HHA division (6/22) and Crissy Carlisle as the CFO (6/28) as indicators that a spin is more likely than a sale, which led to the stock selling off ~2.3% since, even after Thursday’s bounce. We think the recent weakness is because spins generally take more time than a sale and there is some concern around the spin multiple, given that EHC has significantly underperformed its pure-play peers over the past several quarters."

For an analyst ratings summary and ratings history on Encompass Health Corp click here. For more ratings news on Encompass Health Corp click here.

Shares of Encompass Health Corp closed at $79.76 yesterday.

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