Morgan Stanley rates RHC as Equal-weight

Following an investor briefing by Ramsay Health Care, Morgan Stanley notes volumes are improving, with surgical activity above FY19 levels. Maternity and mental health volumes, however, remain below pre-covid levels by around -10% and -12% respectively.

The broker still questions the private hospital value proposition (i.e. pay more and skip the public sector queue) whereby participants are exposed to very high out-of-pocket charges.

During a site visit by the analysts, management stated margin improvements improving labour productivity and “PHI negotiations delivering improved indexation rate outcomes to close the cost/indexation gap”. 

The Equal-weight rating and $53.60 target are unchanged. Industry view: In-Line.

Sector: Health Care Equipment & Services.

Target price is $53.60.Current Price is $53.93. Difference: ($0.33) – (brackets indicate current price is over target). If RHC meets the Morgan Stanley target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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Source: marketscreener.com