Berenberg initiates coverage on Spire Healthcare and Mediclinic
Analysts at Berenberg initiated coverage on Mediclinic and Spire Healthcare on Tuesday as they took a fresh look at the healthcare sector.
Berenberg started Mediclinc off with a 'hold' rating and a 464.0p target price, stating the company's growth outlook and balance sheet had "significantly improved" since March 2020.
However, the analysts stated this looks to be already priced in, with the stock up by 38% year-to-date versus hospital peers - down by 15%.
"Mediclinic trades on 10.3x calendar-year 2023 EV/EBITDA, versus hospital peers on 7.7x. We are in line with consensus for FY23-24 EPS estimates," said Berenberg.
As far as Spire Healthcare was concerned, Berenberg started the stock of with a 'buy' rating and price target of 300.0p, stating it believes the group is "well placed" to benefit from a record NHS waiting list that should result in a surge in both NHS referrals and private demand.
"We think that Spire's targeted cost savings of £15.0m look more than achievable as the company rolls out efficiency programmes and Covid-19-related costs continue to ease," said the German bank.
"Valuation at 7.6x EV/EBITDA for FY23E (versus hospital peers on 7.7x) looks reasonable, in our view, equating to an earnings CAGR of 50% over the next three years. We are 11% ahead of consensus EPS for both 2022 and 2023."
Reporting by Iain Gilbert at Sharecast.com