Smooth Transition Ahead as Ramsay Appoints New CEO From Within the Ranks

This Dominant Tier 1 Private Hospital Operator Offers Growing yet Defensive Earnings

Ramsay Ramps Up Pharmacy Push, Shares Remain Undervalued

Brexit Poses Risks to Ramsay's French and UK Medium-Term Earnings but Long-Term Drivers Are Positive

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Equity Bottom-Up

We maintain our fair value estimate for Ramsay Health Care at AUD 87 per share. Shares in the hospital operator are trading 18% below our intrinsic assessment, and have been adversely impacted by the recent cautious trading update from Healthscope and the release of reform recommendations to the Turnbull government aimed at easing pressure on private health insurance premiums.The disparity in cost of comparable prostheses and medical devices between the public and private systems is significant. However, based on anecdotal evidence, we believe the key beneficiaries have to date been the medical device manufacturers with the private hospital operators largely charging the private insurers at cost plus 1% to 2%. Put simply, we believe the cuts will mostly impact the manufacturers rather than the service providers such as Ramsay.Analyst: Chris Kallos, CFA

We maintain our fair value estimate for Ramsay Health Care at AUD 87 per share. Shares in the hospital operator are trading 18% below our intrinsic assessment, and have been adversely impacted by the recent cautious trading update from Healthscope and the release of reform recommendations to the Turnbull government aimed at easing pressure on private health insurance premiums.The disparity in cost of comparable prostheses and medical devices between the public and private systems is significant. However, based on anecdotal evidence, we believe the key beneficiaries have to date been the medical device manufacturers with the private hospital operators largely charging the private insurers at cost plus 1% to 2%. Put simply, we believe the cuts will mostly impact the manufacturers rather than the service providers such as Ramsay.Analyst: Chris Kallos, CFA

First Steps in Prosthesis List Reform to Impact Manufacturers; Maintaining Ramsay Health Care FVE