Former market darling Ramsay Health Care Limited (ASX: RHC) may yet to return to its market-thumping ways, but not yet according to the bearish analysts at Goldman Sachs.
On March 19 Goldmans' analysts came back with a shock rating on Ramsay shares after a research trip around Europe looking at its operations on the continent in France, the UK and Sweden, which co-exist with its crown jewel Australian operations in terms of consistent profit growth.
Despite flagging that it expects the funding profile in the UK to improve for Ramsay after a couple of tight years and that France just implemented its first tariff increases in a long time the analysts are still negative on the stock largely on valuation grounds it seems.
In fact their 12-month share price target based on a NTM EV/EBITDA ratio of 9.1x is just $52, with Ramsay shares selling for $64.20 today.
The analysts do acknowledge that asset sales or procurement savings provide some upside to the price target, while Ramsay is also supported by the "long-term demographic" of the ageing and rich baby boomer populations spending more on private healthcare.
According to the Wall Street Journal analysts have a median price target of $64.95 on Ramsay shares, with 9 out of the 15 analysts polled sitting on the fence with a 'hold' rating.
