Shares in Spire Healthcare Group PLC (LON:SPI) in morning trading were up 5% following a broker upgrade.
The ‘juice’ was provided by the London arm of the German bank Berenberg, which moved to ‘buy’ from ‘hold’ on shares in the private hospitals group that recently walked away from £1.2bn takeover talks.
The reason for the change in view? Well, Berenberg has looked at the latest updates, which show Spire has ‘materially outperformed’ the rest of the independent sector for NHS in-patients over the July-September quarter.
“A new source of data we have discovered, which reports elective inpatients and daycases, indicates that Spire’s inpatient volume growth is head and shoulders above the competition,” said Berenberg in a note to clients.
Volume growth ahead of rivals
Volume growth for the third-quarter was 6%, where rivals BMI and Nuffield were down respectively 10% and 16%.
“The directional trend is confirmed by analysis of joint replacement procedures, showing Spire growing 6% faster than its peers,” the bank added.
On the back of the latest research, Berenberg has increased its earnings forecasts, which it admits now were too cautious.
Underlying earnings (EBITDA) for 2017 go to £151mln from £148mln, with the 2018 figure moving to £162mln from £151mln.
At 9.45am, Spire shares were changing hands for 248.5p each, up 12.5p. Berenberg thinks the stock is worth 310p following a price target hike from 270p.