Why Is Encompass Health (EHC) Stock Soaring Today

Encompass Health Surges After Strong Earnings Report

Encompass Health (NYSE:EHC), a leading provider of healthcare services, saw its stock price soar by 11.9% during morning trading following the release of robust fourth-quarter results and an upward revision of its profit outlook for 2026.

The company posted adjusted earnings of $1.46 per share for the fourth quarter, surpassing analyst expectations of $1.30. Quarterly revenue climbed 9.9% year-over-year to reach $1.54 billion, aligning with Wall Street forecasts. The main catalyst for the stock’s rally, however, was Encompass Health’s optimistic guidance: management now anticipates adjusted earnings per share of $5.96 at the midpoint for the full year 2026, exceeding market predictions. This positive outlook, along with stronger operating and free cash flow margins, signaled a healthy business trajectory and fueled investor optimism.

Market Reaction and Recent Stock Movements

Historically, Encompass Health’s stock has shown limited volatility, with only five instances of price swings greater than 5% over the past year. This recent surge is unusual for the company and highlights the significant impact of the latest earnings and guidance on investor sentiment.

One of the most notable moves in the past year occurred ten months ago, when shares fell 6% after former President Trump criticized the Federal Reserve’s slow approach to lowering interest rates, warning it could impede economic growth. His remarks heightened concerns about political involvement in monetary policy, especially as Fed Chair Jerome Powell had recently emphasized the challenges of maintaining both stable employment and price levels amid intensifying trade disputes. The lack of progress in US-China trade talks further unsettled investors, leading to a more uncertain outlook as the first quarter of 2025 approached, with unpredictable monetary policy and unresolved trade issues weighing on business confidence.

Since the start of the year, Encompass Health’s stock has gained 4.6%. Despite this, at $111.25 per share, it remains 12.5% below its 52-week high of $127.18 set in October 2025. An investor who purchased $1,000 worth of shares five years ago would now see their investment grow to $1,356.

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