Encompass Health expands footprint with 50-bed rehabilitation hospital in St. George, Utah as stock hits 52-week high

Encompass Health Corporation has revealed preliminary plans to build a 50-bed freestanding inpatient rehabilitation hospital in St. George, Utah, a move that reflects its broader strategic expansion across key regional healthcare markets. Expected to open in 2027, the facility will become the company’s second inpatient rehabilitation hospital in Utah and will be tailored to meet growing demand for post-acute care in the southwestern region of the state.

The announcement follows a consistent trajectory by Encompass Health to widen its presence through greenfield developments in underserved areas. The St. George hospital will provide highly specialized rehabilitation for patients recovering from strokes, traumatic brain injuries, spinal cord injuries, amputations, complex orthopedic conditions, and other debilitating neurological illnesses. The facility will also deliver round-the-clock nursing and therapy services, positioning it as a key local hub for physical, occupational, and speech rehabilitation.

What features will define the new Encompass Health facility in Utah?

The upcoming hospital in St. George will be equipped with private patient rooms, a large therapy gym housing advanced rehabilitation technologies, and a therapy courtyard designed to support outdoor mobility activities. It will also feature an activities of daily living suite to help patients regain independence, a dialysis suite, in-house pharmacy, and communal dining spaces to promote holistic healing.

According to Kim Steward, President of Encompass Health’s West region, the facility aligns with the company’s mission to provide individualized, compassionate care to patients closer to home. The initiative addresses regional gaps in rehabilitation infrastructure and meets increasing demand in a fast-growing area such as St. George.

How does this expansion reflect Encompass Health’s broader growth strategy?

With 167 hospitals across 38 states and Puerto Rico, Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the United States. Its strategy focuses on building capacity in high-growth areas and leveraging its scale and operational efficiency to deliver consistent clinical outcomes. The St. George facility will deepen the company’s regional coverage in the western United States and may also contribute to future patient volume growth across its national network.

This new hospital follows similar expansion moves that seek to capitalize on demographic trends, including the rise of aging populations and the increasing prevalence of post-acute conditions requiring specialized, hospital-grade rehabilitation.

What’s driving the bullish sentiment in Encompass Health’s stock?

Encompass Health Corporation (NYSE: EHC) has seen its share price surge, reaching a 52-week high of $104.55 as of April 14, 2025. The stock has been buoyed by strong investor sentiment following the Utah expansion news, alongside steady financial performance and visible institutional support. The momentum reflects confidence in the company’s consistent earnings trajectory, scale-driven strategy, and targeted geographic expansion into underserved markets.

The stock has maintained upward momentum in recent quarters, outperforming peers in the post-acute healthcare space. This comes as Encompass Health continues to attract attention for its role in meeting the nation’s growing demand for inpatient rehabilitation services.

What are analysts and institutional investors saying?

EHC currently holds a consensus “Buy” rating from Wall Street analysts, with a score of 3.18 based on nine buy recommendations. Barclays and KeyCorp recently raised their price targets to $118 and $120 respectively, citing the company’s robust pipeline and expansion strategy. These ratings reflect positive sentiment on the company’s growth visibility and profitability metrics.

From an institutional ownership perspective, Encompass Health is backed by over 1,165 institutional investors, collectively holding more than 124 million shares. Top stakeholders include The Vanguard Group, Inc. with 10.3% ownership and BlackRock, Inc. with 9.71%. This strong level of institutional holding suggests market confidence in both management and the business model, and it typically aligns with long-term capital stability.

FII/DII data further reinforce this trend, with foreign institutional investors showing steady buying patterns over the last two quarters, despite broader sectoral rotation in U.S. healthcare equities. These flows have remained resilient even amid broader equity volatility, likely driven by Encompass Health’s focus on consistent cash generation and dividend reliability.

What’s the financial outlook ahead of upcoming earnings?

Encompass Health is expected to release its first-quarter 2025 financial results after market close on April 24, 2025. An investor conference call is scheduled for 9 a.m. ET on April 25. Market participants will be watching closely for insights into patient volumes, margin performance, and progress on hospital construction timelines, including the St. George project.

The company’s last reported earnings showed a return on equity of 17.56% and a net profit margin of 8.48%, indicating solid fundamentals. Additionally, the company recently declared a quarterly dividend of $0.17 per share, reinforcing its commitment to shareholder returns even as it funds growth initiatives.

Analysts suggest that if guidance remains intact or improves, the company could see further upside, especially with strong free cash flows enabling both capital expenditures and dividends. The mix of growth and yield has positioned EHC as a preferred name among institutional investors focused on defensive healthcare equities with growth catalysts.

Should investors consider Encompass Health a “Buy” now?

Given its strong operational performance, positive institutional sentiment, robust expansion roadmap, and dividend yield, Encompass Health continues to screen well for long-term investors. The recent 52-week high and analyst upgrades reflect bullish sentiment, but investors should monitor Q1 earnings for additional confirmation on execution timelines, especially regarding St. George and other greenfield projects.

From a valuation perspective, Encompass Health remains fairly priced relative to forward earnings and growth potential, and its institutional backing offers a measure of stability in volatile market conditions. Barring unexpected macroeconomic or regulatory headwinds, analysts broadly suggest that the stock remains a “Buy” as of April 2025.