Inflation, COVID-19 delaying health sector recovery in Australia, NZ - Citi

Fisher & Paykel Healthcare

09/09/2022 24:03

** Citi expects COVID-19 resurgence and rising interest
rates to delay rebound of healthcare demand in Australia and New
Zealand to FY24 
    ** Brokerage expects impact from inflation and labour
shortages to become more apparent over time; says some companies
have pricing power to combat inflation
    ** Prefers product manufacturers over service providers on
their reliance on government funding, which tends to lag
inflation, and availability of healthcare workers
    ** Recommends buy on Ansell Ltd  ANN.AX , Fisher & Paykel
Healthcare Corp  FPH.NZ , Ramsay Health Care  RHC.AX , CSL Ltd
 CSL.AX , and Resmed Inc  RMD.AX  
    ** Expects ANN, FPH, Healius Ltd  HLS.AX , Australian
Clinical Labs  ACL.AX  and Sonic Healthcare  SHL.AX  to bear the
brunt of rising COVID-19 cases in FY23
    ** Sees CSL, Cochlear Ltd  COH.AX , RHC, RMD benefiting from
rising cases; forecasts growth of more than 10% in FY23
    ** Prefers Integral Diagnostics  IDX.AX , ANN, FPH and RHC
the most, in the given order, with Sigma Healthcare  SIG.AX 
being the least-preferred stock
    ** Says manufacturers - COH, CSL, FPH, NAN, and Pro Medicus
Ltd  PME.AX  - insulated from inflation to some degree on better
pricing power

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))