Freedom Broker upgrades Universal Health Realty stock rating to buy

Freedom Broker upgraded Universal Health Realty Income Trust (NYSE: UHT) to a "Buy" rating from "Hold" on Thursday. The price target for the stock has been adjusted downward to $40.00 from $44.00. Currently, the stock is trading at $37.72, resulting in a market capitalization of $524 million. However, InvestingPro data indicates that the shares are overvalued compared to the company's estimated fair value.

The rating change follows the company's Q3 2026 earnings report, which surpassed analyst expectations. The company's revenue exceeded projections, and interest expenses continued to decrease. Funds from Operations (FFO) per share remained unchanged compared to the previous year. Although the interest costs decreased, they were partially offset by the lack of a one-time settlement benefit that was recorded in Q3 2025.

Despite the flat FFO, the trust provides a compelling 8.16% dividend yield and has increased its dividend for 39 consecutive years, according to InvestingPro Tips. Following the quarter's conclusion, Universal Health Realty sold a second land parcel in Chicago. The Miller Medical Plaza is still on schedule for completion in December 2026.

Zhiger Kurmet, a Freedom Broker analyst, explained that the lower price target is due to revised estimates and valuation assumptions.