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Universal Health Services stock target raised on strong quarter

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On Friday, an analyst from TD Cowen adjusted the financial outlook for Universal Health Services (NYSE:), raising the stock price target to $220 from the previous figure of $183. The firm maintained a Hold rating on the stock despite the increase in the price target.

Universal Health Services reported a robust quarter, with notable increases in its Acute EBITDA by 3% and its Psych segment by 18% over the consensus. Moreover, the company’s revenue guidance experienced an upward revision of 1%, while the EBITDA guidance saw a significant 11% increase.

The analyst highlighted the potential for new Service Delivery Programs (SDP) in Tennessee and Washington D.C., which could contribute more than $120 million annually to the company’s revenue, should they receive approval. These new programs are a key driver behind the improved financial forecast for Universal Health Services.

Incorporating these positive developments, TD Cowen is now incorporating an approximate 10 basis points of margin improvement into its financial model for the company through to the year 2025. This adjustment is a reflection of the strong performance and promising prospects identified by the analyst.

The new price target of $220 is set at approximately 8.0 times the TD Cowen’s 2025 adjusted EBITDA estimate for Universal Health Services. This valuation aligns with the company’s 10-year average, suggesting a consistent approach to the stock’s projected value.

In other recent news, Universal Health Services (UHS) has been the subject of various analyst upgrades and price target revisions. BofA Securities raised its price target for UHS shares to $235, maintaining a Buy rating, following a positive guidance update from the company.

The firm noted potential additional supplemental payments pending approval in Tennessee and the District of Columbia, which could significantly boost the company’s financial outlook.

On a similar note, Cantor Fitzgerald upgraded UHS’s stock from Underweight to Neutral, lifting its price target to $219, citing optimism about the company’s acute care segment. Baird also upgraded UHS’s stock from Neutral to Outperform, raising its price target to $236, reflecting the company’s potential for significant earnings growth.

UBS upgraded UHS’s stock from Neutral to Buy, raising the price target to $226. The upgrade reflects a positive outlook on the company’s earnings potential, particularly in its behavioral health services. UHS also declared a cash dividend of $0.20 per share, scheduled for disbursement in June.

Conversely, UBS downgraded Nestle SA (SIX:)’s stock from Buy to Neutral due to persistent pricing pressures and missed organic sales growth targets. The firm set a new price target of CHF95.00, a decrease from the previous CHF117.00, following Nestle’s latest quarterly report. These are among the recent developments that provide investors with updated perspectives on the financial performance and growth potential of these companies.

InvestingPro Insights

Following the upbeat financial outlook from TD Cowen for Universal Health Services (NYSE:UHS), real-time data from InvestingPro further underscores the company’s robust financial health and market position. With a market capitalization of $14.03 billion and a P/E ratio standing at 14.96, UHS is trading at a low P/E ratio relative to near-term earnings growth. This is a key indicator of the stock’s potential undervaluation, especially considering the company’s strong revenue growth of 8.83% over the last twelve months as of Q2 2024.

InvestingPro Tips highlight UHS’s aggressive share buyback strategy and a perfect Piotroski Score of 9, demonstrating strong financial health and prudent management decisions. Additionally, the stock has seen a significant return over the last week with a 13.37% price total return, which may catch the eye of investors looking for short-term gains. For those considering a deeper analysis, InvestingPro offers additional tips on UHS, providing a comprehensive understanding of the stock’s outlook.

Investors interested in further insights can leverage the exclusive InvestingPro platform and apply the coupon code PRONEWS24 to receive up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With additional tips available on InvestingPro, including the latest analyst revisions and stock volatility data, investors can make more informed decisions backed by comprehensive and real-time market data.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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Palantir, Anduril join forces with tech groups to bid for Pentagon contracts, FT reports

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(Reuters) – Data analytics firm Palantir Technologies (NASDAQ:) and defense tech company Anduril Industries are in talks with about a dozen competitors to form a consortium that will jointly bid for U.S. government work, the Financial Times reported on Sunday.

The consortium, which could announce agreements with other tech groups as early as January, is expected to include SpaceX, OpenAI, autonomous shipbuilder Saronic and artificial intelligence data group Scale AI, the newspaper said, citing several people with knowledge of the matter.

“We are working together to provide a new generation of defence contractors,” a person involved in developing the group told the newspaper.

The consortium will bring together the heft of some of Silicon Valley’s most valuable companies and will leverage their products to provide a more efficient way of supplying the U.S. government with cutting-edge defence and weapons capabilities, the newspaper added.

Palantir, Anduril, OpenAI, Scale AI and Saronic did not immediately respond to a Reuters request for comment. SpaceX could not be immediately reached for a comment.

Reuters reported earlier this month that President-elect Donald Trump’s planned U.S. government efficiency drive involving Elon Musk could lead to more joint projects between big defense contractors and smaller tech firms in areas such as artificial intelligence, drones and uncrewed submarines.

Musk, who was named as a co-leader of a government efficiency initiative in the incoming government, has indicated that Pentagon spending and priorities will be a target of the efficiency push, spreading anxiety at defense heavyweights such as Boeing (NYSE:) , Northrop Grumman (NYSE:) , Lockheed Martin (NYSE:) and General Dynamics (NYSE:) .

Musk and many small defense tech firms have been aligned in criticizing legacy defense programs like Lockheed Martin’s F-35 fighter jet while calling for mass production of cheaper AI-powered drones, missiles and submarines.

Such views have given major defense contractors more incentive to partner with emerging defense technology players in these areas.

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Weakened Iran could pursue nuclear weapon, White House’s Sullivan says

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By Simon Lewis (JO:)

(Reuters) -The Biden administration is concerned that a weakened Iran could build a nuclear weapon, White House National Security Adviser Jake Sullivan said on Sunday, adding that he was briefing President-elect Donald Trump’s team on the risk.

Iran has suffered setbacks to its regional influence after Israel’s assaults on its allies, Palestinian Hamas and Lebanon’s Hezbollah, followed by the fall of Iran-aligned Syrian President Bashar al-Assad.

Israeli strikes on Iranian facilities, including missile factories and air defenses, have reduced Tehran’s conventional military capabilities, Sullivan told CNN.

“It’s no wonder there are voices (in Iran) saying, ‘Hey, maybe we need to go for a nuclear weapon right now … Maybe we have to revisit our nuclear doctrine’,” Sullivan said.

Iran says its nuclear program is peaceful, but it has expanded uranium enrichment since Trump, in his 2017-2021 presidential term, pulled out of a deal between Tehran and world powers that put restrictions on Iran’s nuclear activity in exchange for sanctions relief.

Sullivan said that there was a risk that Iran might abandon its promise not to build nuclear weapons.

“It’s a risk we are trying to be vigilant about now. It’s a risk that I’m personally briefing the incoming team on,” Sullivan said, adding that he had also consulted with U.S. ally Israel.

Trump, who takes office on Jan. 20, could return to his hardline Iran policy by stepping up sanctions on Iran’s oil industry.

© Reuters. FILE PHOTO: Iranian flag flies in front of the UN office building, housing IAEA headquarters, in Vienna, Austria, May 24, 2021. REUTERS/Lisi Niesner/File Photo

Sullivan said Trump would have an opportunity to pursue diplomacy with Tehran, given Iran’s “weakened state.”

“Maybe he can come around this time, with the situation Iran finds itself in, and actually deliver a nuclear deal that curbs Iran’s nuclear ambitions for the long term,” he said.

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Ukraine says Russian general deliberately targeted Reuters staff in August missile strike

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(Reuters) -Ukraine’s security service has named a Russian general it suspects of ordering a missile strike on a hotel in eastern Ukraine in August and said he acted “with the motive of deliberately killing employees of” Reuters.

The Security Service of Ukraine (SBU) said in a statement on Friday that Colonel General Alexei Kim, a deputy chief of Russia’s General Staff, approved the strike that killed Reuters safety adviser Ryan Evans and wounded two of the agency’s journalists on Aug. 24.

In a statement posted on Telegram messenger the SBU said it was notifying Kim in absentia that he was an official suspect in its investigation into the strike on the Sapphire Hotel in Kramatorsk, a step in Ukrainian criminal proceedings that can later lead to charges.

In a separate, 15-page notice of suspicion, in which the SBU set out findings from its investigation, the agency said that the decision to fire the missile was made “with the motive of deliberately killing employees of the international news agency Reuters who were engaged in journalistic activities in Ukraine”.

The document, which was published on the website of the General Prosecutor’s Office on Friday, said that Kim had received intelligence that Reuters staff were staying in Kramatorsk. It added that Kim would have been “fully aware that the individuals were civilians and not participating in the armed conflict”.

The Russian defence ministry did not respond to a request for comment on the SBU’s findings and has not replied to previous questions about the attack. The Kremlin also did not respond to a request for comment. Kim did not reply to messages sent by Reuters to his mobile telephone seeking comment about the SBU’s statement and whether the strike deliberately targeted Reuters staff.

The SBU did not provide evidence to support its claims, nor say why Russia targeted Reuters. In response to questions from the news agency, the security agency declined to provide further details, saying its criminal investigation was still under way and it was therefore not able to disclose such information.

Reuters has not independently confirmed any of the SBU’s claims.

Reuters said on Friday: “We note the news today from the Ukrainian security services regarding the missile attack on August 24, 2024, on the Sapphire Hotel in Kramatorsk, a civilian target more than 20 km from Russian-occupied territory.”

“The strike had devastating consequences, killing our safety adviser, Ryan Evans, and injuring members of our editorial team. We continue to seek more information about the attack. It is critically important for journalists to be able to report freely and safely,” the statement said.

Reuters declined to comment further on the allegation that its staff were deliberately targeted.

The SBU statement said Kim had been named a suspect under two articles of the Ukrainian criminal code: waging an aggressive war and violating the laws and customs of war.

“It was Kim who signed the directive and gave the combat order to fire on the hotel, where only civilians were staying,” it said.

Evans, a 38-year-old former British soldier who had worked as a safety adviser for Reuters since 2022, was killed instantly in the strike.

The SBU statement gave some details about how the strike had occurred, according to its investigation.

“To carry out the attack, the Russian colonel general involved one of his subordinate missile forces units,” the Ukrainian agency said, adding that the strike was carried out with an Iskander-M ballistic missile.

The SBU did not identify the specific unit.

© Reuters. FILE PHOTO: Reuters safety advisor Ryan Evans holds a cat during a news assignment, as Russia's attack on Ukraine continues, during intense shelling in Kramatorsk, Ukraine, December 26, 2022. REUTERS/Clodagh Kilcoyne/File Photo

Ivan Lyubysh-Kirdey, a videographer for the news agency who was in a room across the corridor, was seriously wounded. Kyiv-based text correspondent Dan Peleschuk was also injured.

The remaining three members of the Reuters team escaped with minor cuts and scratches.

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