What happened
Shares of Encompass Health (EHC 0.72%) were up more 10.8% on Tuesday after the Centers for Medicare and Medicaid Services (CMS) proposed to increase inpatient rehabilitation-facility payment rates by 3% for fiscal 2024. The company is the largest owner and operator of rehabilitation hospitals in the United States, with 156 hospitals in 37 states and Puerto Rico.
NYSE: EHC
Key Data Points
So what
The move by CMS was the biggest catalyst for Tuesday's stock jump. Encompass Health also released its full 222-page annual report on Tuesday. The company said it had $4.35 billion in revenue in 2022, up 8.3%. It reported opening nine hospitals in 2022 and plans to open eight more this year.
It also said it expects revenue to be up this year. On top of that, a Barclays (BCS 2.47%) analyst increased its target for the stock's price from $57 to $61 on Tuesday.
Encompass had previously released the fourth-quarter and full-year figures on Feb. 7. The company said it had fourth-quarter revenue of $1.37 billion, up 9.8% year over year, and earnings per share (EPS) of $0.90, up 32.4% over the same period a year ago. Yearly EPS was listed as $2.56, down 14.4% over 2021. The company guided for 2023 revenue between $4.68 billion and $4.76 billion.
Now what
Encompass Health stock is up more than 39% so far this year. The positive news from CMS should help the company improve its profits in 2024. It has had a busy month, opening three hospitals, totaling 127 rooms, in Knoxville, Tenn.; Eau Claire, Wis.; and Owasso, Okla. -- the last one in partnership with another hospital operator.