Truist Securities has reiterated a Buy rating on Encompass Health Corp and left its price target at $140.00 following the company’s fourth-quarter report. At the stock’s recent price of $106.78, that target implies about 31% potential upside and sits within the broader analyst band, where price targets span from $130 to $160.
Truist flagged solid underlying volume and cash flow trends in the quarter, noting that margins came in ahead of expectations. The broker also described the company’s initial guidance for 2026 as topping analyst projections, reinforcing a positive view of the company’s near-term operating trajectory.
Analysts highlighted several financial metrics that underpin this outlook. Encompass Health reported revenue growth of 11.13% over the prior twelve months and a price-to-earnings multiple of 19.87. Truist further pointed to strong profitability and cash flow generation as evidence of the company’s financial flexibility; third-party data referenced in the review rated the company’s overall financial health as "GREAT," with particularly strong profitability scores.
On regulatory matters, Truist described management’s remarks as "comforting commentary," calling out specific items labeled RCD and TEAM. The firm emphasized Encompass Health’s "differentiated scale, capabilities and leading quality metrics" alongside the cash flow profile as reasons for continued confidence.
Labor trends were characterized by Truist as "largely favorable," and the broker expects ongoing execution on the company’s expansion pipeline coupled with continued returns of value to shareholders. Encompass Health has paid a dividend for 14 consecutive years and currently offers a 0.72% yield.
Truist also raised its internal estimates for Encompass Health while keeping the $140 price target unchanged, maintaining a constructive stance on the shares. The stock has displayed notable near-term momentum, delivering a 12.32% gain over the past week.
In additional analyst coverage reported alongside Truist’s note, Raymond James reiterated a Strong Buy rating on Encompass Health, with a $130.00 price target. That firm’s analysis pointed to benefits from increased supplemental payments and lower-than-expected startup losses as contributors to the recent outperformance.
Encompass Health’s fourth-quarter 2025 financials provided specific upside to consensus estimates. The company posted earnings per share of $1.46, above the $1.30 forecast, representing a 12.31% surprise. Quarterly revenue matched expectations at $1.54 billion. Adjusted EBITDA came in at $336.0 million, outstripping the consensus estimate of $313.2 million.
Raymond James noted that while Encompass Health experienced higher support costs tied to the Oracle Fusion rollout, the overall financial results remained robust. The combined analyst commentary and reported metrics have supported sustained investor confidence and analyst backing for the company’s ongoing growth narrative.
What this means
The reiteration of the Buy rating and the unchanged $140 target reflect analyst conviction built on better-than-expected margins, favorable labor dynamics, and strong cash flow performance. Multiple firms backing the stock, together with positive quarterly earnings and EBITDA beats, suggest a consensus of optimism among sell-side analysts.
Limits of the coverage - The commentary is grounded in the company’s reported quarter and the analysts’ published views; it does not attempt to forecast outcomes beyond the statements and figures presented by management and the cited brokers.