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Encompass Health's (EHC) 155th Hospital Opens in Wisconsin

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Encompass Health Corporation (EHC - Free Report) recently announced that its Rehabilitation Hospital of Western Wisconsin has opened, marking its first location in the state. The new facility is a joint venture between EHC and HSHS Sacred Heart Hospital, an affiliate of Hospital Sisters Health System.

The 36-bed inpatient rehabilitation unit is placed inside the HSHS Sacred Heart Hospital, which will allow a seamless transition for patients into an advanced rehabilitation program. The new hospital with advanced and updated technologies replaces HSHS Sacred Heart Hospital’s old facility with 24 beds. It will help patients to recover from debilitating illnesses and injuries, which incorporate complex orthopedic conditions, brain and spinal cord injuries, amputations, strokes and other neurological disorders.

The new hospital marks Encompass Health's 155th inpatient rehabilitation facility in the country. Earlier this month, it opened a 51-bed inpatient rehabilitation unit named Patricia Neal Rehabilitation Hospital West in Knoxville, TN, with its joint venture partner, Covenant Health. It was Encompass Health’s 10th location in Tennessee.

The new hospitals are expected to improve the company’s patient volumes, which will, in turn, boost its revenues. Its revenues are witnessing a consistent rise. For 2023, the company expects net operating revenues to be within $4,680-$4,760 million, the mid-point of which indicates an improvement of 8.5% from the 2022 reported figure of $4,348.6 million. Also, an aging population is likely to continue to boost demand for the company’s services.

The move is in line with the company’s strategy of boosting its presence and capturing a better market share of a fragmented market. EHC intends to inaugurate eight hospitals this year. It targets to add 80-120 beds on an annual basis in the 2023-2027 period, with 6-10 de novos per annum.

Price Performance

Shares of Encompass Health have gained 5.8% in the past six months against the 6.5% fall of the industry.

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Zacks Rank and Key Picks

Encompass Health currently has a Zacks Rank #3 (Hold). Meanwhile, investors interested in the broader medical space may look at players like Avanos Medical, Inc. (AVNS - Free Report) , Viemed Healthcare, Inc. (VMD - Free Report) and BioLife Solutions, Inc. (BLFS - Free Report) , each 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 Avanos Medical’s 2023 earnings predicts 1.8% year-over-year growth. AVNS beat earnings estimates in all the past four quarters, with the average being 11%.

The consensus mark for Viemed’s 2023 earnings indicates an 87.5% year-over-year increase. Furthermore, the consensus estimate for VMD’s revenues in 2023 suggests 15% year-over-year growth.

The Zacks Consensus Estimate for BioLife Solutions’ 2023 earnings suggests 84.2% year-over-year growth. Also, the consensus mark for BLFS’ 2023 revenues suggests 20.7% year-over-year growth.

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