On Friday, Oppenheimer maintained its Outperform rating on shares of The Ensign Group Inc. (NASDAQ:ENSG) and increased the price target to $168 from $165. This adjustment follows The Ensign Group's third-quarter earnings report, which exceeded expectations. The company reported an adjusted earnings per share (EPS) of $1.39, surpassing both Oppenheimer's and Street's estimates of $1.36 and $1.37, respectively.
Moreover, The Ensign Group's adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent (EBITDAR) reached $175.0 million, which is also above the anticipated $173.4 million by Oppenheimer and $173.0 million by Street.
The Ensign Group's financial performance was notably bolstered by an increase in investment income, which contributed an additional $2 million. Operational metrics were aligned with forecasts, underpinned by a robust same-store revenue growth of 7.3% and a record same-store occupancy. The company has also been actively pursuing its merger and acquisition (M&A) strategy, having added 12 operations in the third quarter and 27 year-to-date.
In light of these results, The Ensign Group has updated its full-year 2024 EPS guidance to a range of $5.46 to $5.52, up from the previous range of $5.38 to $5.50. This new guidance implies that the fourth-quarter EPS will be between $1.45 and $1.51, compared to the prior Oppenheimer and Street estimates of $1.45 and $1.46, respectively.
Following the third-quarter performance, Oppenheimer has revised its EPS estimates for The Ensign Group for the fiscal years 2024, 2025, and 2026 to $5.49, $6.15, and $6.79, respectively, from the previous estimates of $5.43, $6.03, and $6.66. The firm's analysis suggests that The Ensign Group is in a strong position to continue its M&A strategy moving forward.
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