Universal Health upgraded to Equal Weight on improved rates at Wells Fargo

Wells Fargo analyst Stephen Baxter upgraded Universal Health Services to Equal Weight from Underweight with a price target of $154, up from $113. The analyst views the risk/reward for the healthcare facilities group as "fairly balanced." The sustainability of improved rate dynamics in Universal’s behavioral business is likely to be greater than initially expected, which could drive improved hiring growth in 2023 and potentially allow for some re-capture of margin lost during COVID, Baxter tells investors in a research note. If results in the company’s behavioral business show signs of positive inflection, the stock’s valuation could continue to appreciate, says the analyst.