Morgan Stanley has adjusted its ratings on several healthcare companies ahead of the upcoming reporting season. Ramsay Health Care, a hospital operator, received a downgrade to “underweight,” signalling a less optimistic outlook from the investment bank. Equities analyst David Bailey noted that the downgrade reflects moderated growth assumptions, particularly concerning the company’s operations in the UK, leading to earnings per share downgrades.
Despite a cautious stance on the broader healthcare sector, Morgan Stanley sees a positive “risk and reward” balance for CSL and ResMed. CSL, a global biotechnology leader that researches, develops, manufactures, and markets a range of biotherapies, is expected to perform well in the long term, even with forecasts suggesting that half-year profits might slightly miss market expectations. ResMed, a company focused on developing medical devices and cloud-based software solutions that diagnose, treat, and manage respiratory conditions, is also favoured by the analysts.
Other companies expected to perform strongly include Telix Pharmaceuticals and Fisher & Paykel Healthcare. These high-growth stocks are anticipated to benefit from new product pipelines and an increase in hospitalisations within the United States. However, not all companies received a positive assessment. Cochlear, a hearing implant maker, joins Ramsay at the bottom of Morgan Stanley’s list, with analysts expressing concerns about its current valuation.
