Encompass Health to Spin off Home Health and Hospice Business

Integrated healthcare services provider Encompass Health Corp. (NYSE: EHC) plans to spin off its home health and hospice (HH&H) business into an independent company and rebrand it as Enhabit Home Health & Hospice.

The spin-off is likely to take place during the first half of this year, with EHC’s shareholders owning stock in the new company. The re-branding is likely to commence in mid-April and conclude along with the completion of the spin-off.

Encompass Health’s Board believes that the move will improve the strategic and operational flexibility of the HH&H business.

About Encompass Health

Alabama-based Encompass Health offers facility-based and home-based patient care through its network of inpatient rehabilitation hospitals, home health agencies and hospice agencies. It runs 145 hospitals, 251 home health locations, and 96 hospice locations in 42 U.S. states and Puerto Rico.

The company’s shares lost 0.7% on Wednesday to close at $61.22.

Wall Street’s Take

Recently, Bank of America Securities analyst Kevin Fischbeck maintained a Buy rating on the stock but lowered the price target to $80 from $88 (30.7% upside potential).

Overall, the stock has a Strong Buy consensus rating based on 6 unanimous Buys. The average Encompass Health stock prediction of $83 implies 35.6% upside potential. Shares have lost 29% over the past year.

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