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(Sharecast News) - RBC Capital Markets initiated coverage of shares of private healthcare provider Spire Healthcare at 'outperform' with a 149p price target on Monday, ahead of the company's first-half results next week.
The bank said its analysis of recent NHS activity data, including new specialism level metrics, indicates that the high-margin orthopaedics segment has driven a strong acceleration in NHS revenues, which it expects to result in a positive surprise in H1 2019.
"We would buy into the results on 16 Sept," it said.
RBC noted that Spire's orthopaedic referrals have been up an average of 16-20% since December 2018, driving high-teens/ low-20s total referral growth.
"Peer Ramsay Health Care's results imply teens NHS volume growth in Jan-Jun, and Spire's data trend is even more compelling, albeit having picked up a few months later," it said.
As a result, RBC reckons that Spire's 2019 revenues can exceed the upper end of the consensus range, with the bank 3% above consensus on both revenues and earnings before interest, taxes, depreciation and amortisation.
At 1305 BST, the shares were up 3.8% at 115.55p.
3 Dec 2019 16:02