Encompass Health (EHC) forms joint venture with NCH Healthcare in Naples

Encompass Health Society EHC recently announced plans to form a joint venture (JV) with nonprofit multi-facility healthcare alliance NCH Healthcare System to open and operate an inpatient rehabilitation hospital in Naples, Florida.

The move is expected to improve inpatient rehabilitation services in Naples. The 50-bed freestanding hospital, currently under construction at 14305 Collier Boulevard, is expected to open in August 2022. Following launch, NCH Healthcare is expected to relocate its NCH Brookdale Center for Healthy Aging & Rehabilitation, an existing 54-bed rehabilitation facility . , at the new hospital.

The inpatient rehabilitation solution complements acute care services and helps patients restore their functional abilities. The board of directors of NCH Healthcare has given its approval to invest in this JV. The move is expected to improve the quality and reach of inpatient rehabilitation services in the community. Entering the joint venture is in line with Encompass Health’s strategy to focus on more profitable inpatient rehabilitation operations.

EHC is set to streamline its global business through a spin-off of its home health and palliative care businesses on July 1, 2022. Following the separation, Encompass Health will have a single reportable segment, which is patient rehabilitation. hospitalized. Its net operating income for 2022 is expected to be between $4,250 million and $4,300 million. This unit reported net operating revenue of $4,015 million in 2021. EHC plans to add 100-150 beds and 6-10 de novos per year during 2022-2026.

Following the split, the new entity will be called Enhabit and will have two segments to present, namely home healthcare and palliative care. Management expects Enhabit’s net services revenue to be between $1,080 million and $1,120 million for 2022.

Price performance

Shares of Encompass Health are down 30.4% over the past year compared to the 51.1% drop in the industry to which it belongs.

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Zacks Ranking and Key Picks

Encompass Health currently has a Zacks Rank #3 (Hold). Some top ranked actions in the medical field are Select Medical Holdings Corporation SEM, Omega Therapeutics, Inc. OMGA and Progyny, Inc. PGNY, each carrying a Zacks Rank #2 (Buy) at present. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks consensus estimate for Select Medical’s earnings is currently pegged at $2.19 per share. SEM has seen an upward revision in estimates over the past 60 days versus none in the opposite direction.

Earnings for Select Medical have exceeded estimates in each of the past four quarters, averaging 42%.

The Zacks consensus estimate for Omega Therapeutics earnings shows a 28.9% increase over the previous year’s figure. OMGA has seen three upward revisions to estimates and no downward movement in the past 60 days.

Omega Therapeutics’ earnings have exceeded estimates twice in the past four quarters and missed the target the other two times.

The Zacks consensus estimate for Progyny’s bottom line in 2022 has improved 4.5x over the past 60 days. PGNY has seen three upward estimate revisions in the same period versus none in the opposite direction.

Progyny’s earnings have exceeded estimates in each of the past four quarters, averaging 169.7%.

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