S&P Global Ratings affirmed Universal Health Services Inc.'s issuer credit rating at BB+, with a stable outlook.
According to S&P, the rating reflects Universal Health's well-established conservative financial policies which help keep the King of Prussia, Penn.-based hospital operator's leverage lower compared to other players in the industry.
The stable outlook is based on the ratings agency's expectations that Universal Health's revenues and EBITDA will continue to grow. The company's revenue is anticipated to grow organically by about 3.5% to 4.5%, which will be enhanced by modest acquisitions over time.
In addition, S&P is banking on Universal Health's ability to effectively manage reimbursement risk, with a sustained leverage between 2x and 3x, through the even revenue mix of its behavioral and acute care businesses.
The ratings agency expects Universal Health to utilize its cash flow by fully funding its modest acquisition and development plans, with the remaining free cash flow allocated for share repurchases.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.