UHS
Universal Health Services, Inc.
$157.80
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 50.2% below fair value
You pay
$157.80
Bear
$253.74
Fair
$317.17
Bull
$380.61
Bear
$253.74
+60.8%
$23.19 × 12x P/E
Fair
$317.17
+101.0%
$23.19 × 15x P/E
Bull
$380.61
+141.2%
$23.19 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
6.8x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $226.00 from 43 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $317.17 per share.
Warnings
Wall Street's average price target is $226.00 (from 43 analysts). Our estimate is 58% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples