The Ramsay Health Care Limited (ASX: RHC) share price has been underperforming in 2021.
Since the start of the year, the private hospital operator's shares have risen just 5.5%. This follows a 7% decline so far in November.
Is the Ramsay share price good value now?
The subdued performance of the Ramsay share price this year has been driven by concerns over the difficult trading conditions the company is facing in Australia from lockdowns.
The good news, though, is that the team at Goldman Sachs believe this underperformance is a buying opportunity for investors.
According to a recent note, the broker has reiterated its buy rating and $74.00 price target on its shares.
Based on the current Ramsay share price of $66.20, this implies potential upside of approximately 12% for investors over the next 12 months.
Goldman is also forecasting a dividend yield of approximately 2% in FY 2022, bringing the total return on offer to ~14%.
Why does Goldman like Ramsay?
Goldman continues to highlight Ramsay as one of the more attractive recovery trades across its coverage.
It commented: "RHC's operating performance in 1Q22 was heavily impacted by various restrictions, lockdowns and other challenges associated with the pandemic. However: 1) these dynamics were widely understood (and experienced by most) prior to today; and 2) positive revenue growth (+1.3%) was ahead of our expectations given the severity of disruption during the period (widespread elective surgery bans/restrictions, isolation orders/lockdowns and infection-driven staffing shortages/procedure cancellations)."
"Despite these challenges, growth was positive in each of UK (+21%), Europe (+5%) and Asia (+15%), as the extent of volume recovery more than offset the impact of Covid-driven disruption and, whilst operating performance remains some way below pre-Covid levels, an improving trajectory is clear, and we believe the set-up for 2022 looks favourable," the broker added.
All in all, Goldman Sachs appears to believe it could be worth sticking with the Ramsay share price and sees strong returns on the horizon.
