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Should you buy Ramsay Health Care Limited shares today?

The Ramsay Health Care Limited (ASX: RHC) share price has been a bit of a disappointment over the last 12 months. During this time it has fallen by approximately 5.5%.

But according to one leading broker, now could be a good time to consider accumulating shares.

What has the broker said?

A note out of Ord Minnett this week reveals that its analysts have given the private hospital operator an accumulate rating with a slightly reduced $80.00 price target. For those that are unaware, an accumulate rating ranks between buy and hold ratings.

This price target implies potential upside of almost 20% for its shares over the next 12 months.

According to the note, the broker believes that its Australian operations will be the main driver of growth during the first-half of FY 2018 along with the benefits of its multi-year procurement savings program.

Overall, its analysts have forecast a 7% increase in Australian revenue despite the negative impact of cuts to prostheses prices. Ramsay is due to release its half-year result on February 28.

Should you invest?

Whilst I think that Ramsay is one of the best shares in the healthcare sector and a great buy and hold investment option, it may be prudent for investors to sit tight and wait to see how Ramsay’s first-half has been before hitting the buy button.

After all, with its shares trading at a premium to the market average, if its first-half falls short of expectations then its share price could take a tumble. This would of course present investors with an opportunity to buy shares at an even more attractive price.

If its result is solid and its outlook positive, I would suggest investors snap up shares ahead of industry peers Healthscope Ltd (ASX: HSO) and Primary Health Care Limited (ASX: PRY).

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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