S&P/ASX 200 Index (ASX: XJO) healthcare share Ramsay Health Care Ltd (ASX: RHC) is edging lower today.
Shares in Australia's biggest private hospital operator closed yesterday trading for $35.55. In early afternoon trade on Thursday, shares are changing hands for $35.49, down 0.2%.
For some context, the ASX 200 is up 0.5% at this same time.
Longer term, Ramsay Health Care shares have gained 4% in 2025, slightly underperforming the 5.2% year-to-date returns posted by the benchmark index.
Atop those share price gains, the ASX 200 healthcare share also trades on a fully franked 2.3% trailing dividend yield.
While the past year's performance has been modest, looking ahead, Family Financial Solutions' Jabin Hallihan believes Ramsay Health Care shares are currently materially undervalued (courtesy of The Bull).
Here's why.
Should you buy the ASX 200 healthcare share today?
"Ramsay is one of Australia's largest private hospital operators," Hallihan said. "Strong fundamentals and margin recovery support long term growth."
As for his buy recommendation on the ASX 200 healthcare share, he noted, "In Australia, RHC reported revenue growth of 6.5% in the first quarter of 2026 compared to the prior corresponding period. Earnings before interest and tax rose 5.8%."
And earnings are forecast to keep growing.
"RHC expects EBIT growth in full year 2026," Hallihan noted.
He concluded:
Ramsay's shares remain undervalued relative to our fair value estimate of $54, as we expect profitability to improve through higher indexation, digital efficiencies and easing wage pressures. The shares were trading at $37.23 on December 4.
Going by Family Financial Solutions' fair value estimate, that implies a potential 52.2% upside from the current share price.
What's the latest from Ramsay Health Care?
Ramsay Health Care shares closed up 12.7% on 25 November, the day the company held its annual general meeting (AGM).
Investors were buying the ASX 200 healthcare share amid ongoing progress following what management admitted was a difficult year gone by.
"While there is still much work ahead and cost pressures remain, the board is encouraged by the progress we are making towards improving the performance of our Australian and UK hospital businesses," Ramsay Health Care chair David Thodey said on the day.
Ramsay Health Care CEO and managing director Natalie Davis added:
Over the past year, we've maintained our leading patient NPS scores across our regions. We're growing our clinical trials network in Australia to expand access to new treatments, to strengthen our doctor value proposition and to build partnerships that support clinical innovation.
