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Hospitals group Mediclinic among FTSE 100 risers on positive outlook

Discussion in 'Market News' started by Lily, Jun 13, 2016.

  1. Lily

    Lily Forum Member

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    Deutsche Bank issues buy note on South African group following recent results

    Mediclinic is one of those companies it seems a surprise to find is a member of the FTSE 100, but it is currently one of the biggest risers in the leading index.

    The South African hospital business gained its listing with a reverse takeover of London-listed Al Noor Hospitals, a United Arab Emirates medical group, in February. Since then its shares have had a bumpy ride, but a buy note from Deutsche Bank with a £10.80 price target has helped push them 8p or nearly 1% higher to 890.5p. In the wake of the company’s recent results, the bank’s analyst Avinash Kalkapersad said:

    We retain our positive stance on the South African hospital sector with aging populations expected to drive growth in healthcare demand. Mediclinic is our top pick as we note it offers investors volume growth, robust pricing, stable margins and potential value enhancing acquisitions through its prominent positioning across four territories. We forecast earnings growth of 17% per annum over the next three years. The stock is currently trading on a 12m forward PE of 19.9 times, cheaper than both European and emerging market peers.

    We forecast double digit earnings growth from Mediclinic’s UAE franchise on the back of attractive industry tailwinds, bed growth and acquisition synergies. The company is well positioned in both Abu Dhabi and Dubai and we expect management to further consolidate these territories, providing a platform for expansion into other Middle East territories.

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