Investors in Encompass Health Corporation (NYSE:EHC) had a good week, as its shares rose 3.4% to close at US$105 following the release of its first-quarter results. Revenues were US$1.6b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.93, an impressive 29% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the consensus forecast from Encompass Health's eleven analysts is for revenues of US$6.43b in 2026. This reflects a reasonable 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 3.2% to US$6.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.42b and earnings per share (EPS) of US$5.89 in 2026. So the consensus seems to have become somewhat more optimistic on Encompass Health's earnings potential following these results.

The consensus price target was unchanged at US$141, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Encompass Health analyst has a price target of US$150 per share, while the most pessimistic values it at US$130. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 8.0% growth on an annualised basis. That is in line with its 8.1% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.8% per year. So although Encompass Health is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Encompass Health following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$141, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Encompass Health analysts - going out to 2028, and you can see them free on our platform here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.