Australian healthcare firms to battle cost pressures, soft margins in 2024 - Morgan Stanley

Ramsay Health Care

14/01/2024 23:42

** Analysts at Morgan Stanley expect cost inflation to
continue to lead to soft margin outcomes for Australian
healthcare companies this year
    ** Australian healthcare sub-index  .AXHJ  down 0.4% in
early trading on Monday after gaining 2.3% in 2023
    ** Brokerage says for most healthcare stocks, volume
recovery to pre-pandemic levels has been sluggish and has
resulted in EPS pressures
    ** MS says its key "overweight" rated stocks are CSL
 CSL.AX  and Sonic Healthcare  SHL.AX 
    ** Brokerage says rate of recovery in plasma gross margin
could be key driver for CSL's share price outperformance in 2024
    ** MS says staffing shortages have been a major detractor
from volume recovery and have mostly inhibited service providers
like Ramsay Health Care  RHC.AX  
    ** MS sees labour costs remaining elevated across FY24 for
Integral Diagnostics  IDX.AX ; remains unconvinced that Healius
 HLS.AX  will achieve FY24 guidance

 (Reporting by Himanshi Akhand in Bengaluru)
 ((Himanshi.Akhand@thomsonreuters.com;))