Ramsay Health Care: Improving volumes, but productivity lags
About the author:
- Author name:
- By Dr Derek Jellinek
- Job title:
- Senior Analyst
- Date posted:
- 04 May 2023, 6:30 AM
- Sectors Covered:
- A nine-month FY23 trading update from Ramsay Health Care (ASX:RHC) highlighted improving volumes across all regions on increased surgical activity, although margins and profit lagged.
- While COVID-related headwinds are subsiding, labour shortages and inflationary pressures remain, dampening a full recovery in underlying profitability.
- We continue to view a gradual uplift in activity, with leverage likely to improve, and a more “normalised” FY24, although profitability remains contingent on multiple unknowns (eg tariff negotiations; recruitment/retention; lower agency nurse usage; and additional capacity gains) obscuring visibility.
- We have adjusted our FY23-25 earnings lower, with our price target decreasing to (login to view). Add.
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