Ramsay Healthcare reported FY18 results in-line with market consensus, however, the FY19 guidance was below expectations.
Underlying earnings increased 7% in FY18 and that growth rate is likely to slip to 4 – 5% in FY19. With the stock on a forward yield of 2.7% we see further downside risk to the share price in the short-term.
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RHC is a high quality business and we’ll be watching for the next Algo Engine buy signal.
Material earnings benefits from new hospital projects are expected in the coming years; we see both Healthscope and Ramsay Healthcare as long-term value plays with a defensive yield.
Buy Healthscope today and remain patient for the entry condition into Ramsay.
