Barclays upgraded three healthcare companies as a gathering ‘new normal’ gives analysts reason to take a more constructive stance on the laggards within the sector.
A higher degree of earnings visibility is now apparent in a post COVID-19 world, the analysts said in a note to clients on Wednesday.
“This is particularly the case at private hospital operators, in our view, where we expect a backlog of surgeries to support a recovery in elective procedures, structurally higher healthcare spend over the medium term and a likely more favourable regulatory backdrop going forward.”
“Having spoken to the CEO and assessed the turnaround thus far, [we] believe now is the time to change our historically cautious view on the company.”
Whilst ConvaTec's transformation is though likely to be a multi-year story, the Barclays team expect increased investment in the Coloplast stoma business to generate the same level of growth going forward.
The stock was upgraded to ‘overweight’ from ‘equal weight’ and its share price target was upped to 240p from 190p.
Mediclinic International target price was cut to 350p from 400p and Spire’s to 100p from 120p.