It's been a pretty great week for Encompass Health Corporation (NYSE:EHC) shareholders, with its shares surging 13% to US$125 in the week since its latest second-quarter results. The result was positive overall - although revenues of US$1.6b were in line with what the analysts predicted, Encompass Health surprised by delivering a statutory profit of US$1.54 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the consensus forecast from Encompass Health's twelve analysts is for revenues of US$6.46b in 2026. This reflects a reasonable 4.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 4.1% to US$6.37. Before this earnings report, the analysts had been forecasting revenues of US$6.42b and earnings per share (EPS) of US$6.16 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 rose 5.5% to US$148, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. Currently, the most bullish analyst values Encompass Health at US$155 per share, while the most bearish prices it at US$140. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 8.3% growth on an annualised basis. That is in line with its 9.2% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.9% annually. 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Encompass Health's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Encompass Health 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.