Jefferies upgraded Spire Healthcare on Friday to ‘buy’ from ‘hold’ and lifted the price target to 250p from 240p, arguing that the market is underappreciating the company’s growth opportunity.
It said that despite overall macro concerns, it is encouraged by resilient UK healthcare market conditions.
It said that Spire’s recent performance under-appreciates its growth opportunity “given the particular UK healthcare market dynamics with a significant NHS waiting list and labour challenges”.
“We bake in inflationary pressures (mainly salary), and believe that both pricing and demand could help SPI manage its cost headwinds, providing resilience to its profitability,” it said. “In our view, market concerns are likely to be alleviated with enhanced confidence in the company’s outlook from 2H’23.”
Jefferies said the improvement of profitability and management focus on asset efficiency should also improve return to shareholders.
A1045 BST, the shares were up 1.6% at 215p.
