Jana Partners Wants a Different Scenario For Encompass Health Corporation

• The Rosen Law Firm investigates potential securities claims against Encompass Health Corporation (NYSE:EHC) following allegations of misleading business information.
• Despite recent controversies, UBS upgraded Encompass Health's stock to a "Buy," raising the price target from $140 to $150.
• Encompass Health's current stock price stands at $123.23, with a market capitalization of approximately $12.41 billion.

Encompass Health Corporation (NYSE:EHC) is under scrutiny as The Rosen Law Firm investigates potential securities claims on behalf of its shareholders. The investigation stems from allegations that Encompass Health may have issued misleading business information. This follows a New York Times article on July 15, 2025, which reported serious incidents of patient harm and below-average safety performance at some of its rehab hospitals. The article's publication led to a 10.3% drop in Encompass Health's stock on the same day.

The Rosen Law Firm is preparing a class action to recover investor losses, offering a contingency fee arrangement that requires no out-of-pocket fees from investors. Known for its expertise in securities class actions, the firm has a strong track record, including securing the largest ever securities class action settlement against a Chinese company. Investors who have suffered losses are encouraged to contact the firm to join the prospective class action.

Despite these challenges, UBS upgraded Encompass Health's stock to a "Buy" on October 2, 2025. At the time, the stock was priced at $124.27, and UBS raised the price target from $140 to $150. This upgrade suggests confidence in the company's future performance, despite the recent controversies.

Currently, Encompass Health's stock is priced at $123.23, reflecting a slight decrease of 0.32, or -0.259% in percentage terms. The stock has traded between $122.64 and $124.44 today. Over the past year, it has reached a high of $127.86 and a low of $87.85, indicating some volatility in its performance.

Encompass Health's market capitalization is approximately $12.41 billion, with a trading volume of 1,017,291 shares on the NYSE. This data reflects the company's significant presence in the market, despite the ongoing legal and reputational challenges it faces.

Encompass Health Corporation (NYSE:EHC) is a leading provider of inpatient rehabilitation services in the United States. Headquartered in Birmingham, Alabama, EHC operates numerous rehabilitation hospitals across the country. The company competes with other healthcare providers in the rehabilitation sector, focusing on delivering high-quality patient care and maintaining strong financial performance.

On October 28, 2024, EHC reported earnings per share (EPS) of $1.06, surpassing the estimated $0.94. This performance reflects an improvement from the $0.86 per share reported in the same quarter last year, as highlighted by Zacks. The company's ability to exceed expectations demonstrates its strong operational efficiency and effective cost management strategies.

EHC also reported revenue of approximately $1.35 billion, exceeding the estimated $1.33 billion. This revenue growth indicates a positive trend in the company's top-line performance. The company's price-to-sales ratio of about 1.80 suggests that the market values EHC at nearly 1.8 times its annual sales, reflecting investor confidence in its revenue-generating capabilities.

The company's financial health is further supported by its enterprise value to sales ratio of around 2.30 and an enterprise value to operating cash flow ratio of approximately 60.92. These metrics provide insight into EHC's valuation and cash-generating ability, which are crucial for sustaining growth and meeting financial obligations.

EHC's debt-to-equity ratio of roughly 1.05 indicates a moderate level of debt compared to its equity, suggesting a balanced approach to leveraging. Additionally, the current ratio of approximately 1.04 shows that EHC has a slightly higher level of current assets compared to its current liabilities, indicating a modest level of short-term financial health.

Encompass Health Corporation (NYSE:EHC) is a leading provider of inpatient rehabilitation services in the United States. Headquartered in Birmingham, Alabama, EHC operates numerous rehabilitation hospitals across the country. The company competes with other healthcare providers in the rehabilitation sector, focusing on delivering high-quality patient care and maintaining strong financial performance.

On October 28, 2024, EHC reported earnings per share (EPS) of $1.06, surpassing the estimated $0.94. This performance reflects an improvement from the $0.86 per share reported in the same quarter last year, as highlighted by Zacks. The company's ability to exceed expectations demonstrates its strong operational efficiency and effective cost management strategies.

EHC also reported revenue of approximately $1.35 billion, exceeding the estimated $1.33 billion. This revenue growth indicates a positive trend in the company's top-line performance. The company's price-to-sales ratio of about 1.80 suggests that the market values EHC at nearly 1.8 times its annual sales, reflecting investor confidence in its revenue-generating capabilities.

The company's financial health is further supported by its enterprise value to sales ratio of around 2.30 and an enterprise value to operating cash flow ratio of approximately 60.92. These metrics provide insight into EHC's valuation and cash-generating ability, which are crucial for sustaining growth and meeting financial obligations.

EHC's debt-to-equity ratio of roughly 1.05 indicates a moderate level of debt compared to its equity, suggesting a balanced approach to leveraging. Additionally, the current ratio of approximately 1.04 shows that EHC has a slightly higher level of current assets compared to its current liabilities, indicating a modest level of short-term financial health.

Activist investment firm Jana Partners is planning to push Encompass Health Corporation (NYSE:EHC) to re-engage with interested third parties on a merger for the company’s home health and hospice business before moving forward with a plan of separating it into an independent public company via a carve-out IPO, spin-off, or split-off.

Jana Partners, which is rumored to have teamed up with health care industry executive Edwin "Mac" Crawford in order to make the company implement this change, believes there is interest from private firms to combine with the home health and hospice business of the company and this is believed to help the company manage challenging conditions in the healthcare industry, including a shortage of nurses.

The company’s share price has declined around 20% since the start of the year.