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Encompass (EHC) Opens Its 4th Inpatient Rehab Unit in Illinois

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Encompass Health Corporation (EHC - Free Report) recently opened the Quad Cities Rehabilitation Institute at 653 52nd Avenue in Moline, IL. The hospital has been built by the joint venture between EHC and UnityPoint Health – Trinity, a nonprofit health system.

The inpatient rehabilitation facility has 40 beds and serves patients who are recovering from enervating and complex illnesses and injuries. It provides multiple therapies and 24-hour nursing care. It is the only freestanding inpatient rehabilitation unit in the region. The new hospital marks EHC’s fourth facility in the state and 152nd inpatient rehabilitation unit overall.

Encompass Health aims to address the demand for facility-based post-acute care services in different markets by constructing or acquiring new hospitals in those extremely fragmented industries. It expects to make 100-150 bed additions and 6-10 de novos per annum in the 2022-2026 period. In 2022, it intends to open three additional de novo locations and increase the bed count by 20 in the existing facilities. Further, it expects to open nine de novo locations in 2023 with 100-150 bed additions in existing hospitals.

EHC is strongly focusing on its inpatient rehabilitation business. To ensure this, it completed the spin-off of its home health and hospice business into an independent company on Jul 1, 2022. The new entity is named Enhabit, Inc. (EHAB - Free Report) . With the spin-off of this unit, the company plans to further grow its core business, Inpatient Rehabilitation. Revenues in the segment amounted to $1,062.5 million in the second quarter of 2022, improving 6.1% year over year. This growth came on the back of favorable pricing and volume growth.

Price Performance

Shares of Encompass Health have declined 35.2% in the past year compared with the 31.3% fall in the industry.

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Zacks Rank and Key Picks

Encompass Health currently has a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader medicalspace are Hanger, Inc. and Quest Diagnostics Incorporated (DGX - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Hanger’s 2022 bottom line indicates a 17.5% increase from the prior year’s reported number. The consensus mark for HNGR’s 2022 revenues signals an 8.3% year-over-year jump.

The Zacks Consensus Estimate for Quest Diagnostics’ 2022 bottom line has increased 1.3% in the past 30 days. DGX beat earnings estimates in three of the past four quarters and missed once, with the average surprise being 12.1%.


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