Story updated at 9:50 a.m. to reflect market activity.
Shares of Universal Health fell 0.7% to $108.31 in morning trading.
The analyst firm raised its price target for the hospital operator to $123 from $105. BMO analysts now expect Universal Health to report earnings of $5.77 a share in 2014 and $6.51 a share in 2015, up from previous estimates of $5.70 and $6.21, respectively.
"We are upgraded shares of Universal Health Services to Outperform from Market Perform following the company's acquisition of Cygnet Health Care Limited," BMO analysts Jennifer Lync and Kamellia Saroop wrote. "We believe a footprint in the U.K. behavioral health market offering top-line growth opportunity as well as the potential for margin expansion."
Separately, TheStreet Ratings team rates UNIVERSAL HEALTH SVCS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNIVERSAL HEALTH SVCS INC (UHS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
You can view the full analysis from the report here: UHS Ratings Report