Population growth forecasts were revised down over 2021-23 in the federal budget as a result of declining net overseas migration (border closures) and a declining fertility rate with families delaying having children amid the uncertainty associated with covid-19.
This leads UBS to reduce its private hospital volume assumptions for the period 2020-22. It needs to be noted since those aged 50 years and above have the greatest private hospital utilisation, the magnitude of the change in volume growth forecast is less than the change in revised population due to demographics and the broker does not make any changes to its current assumptions.
UBS does not expect any uplift in contribution from private health insurance participation or utilisation of policies.
UBS retains its Neutral rating with a target price of $71.20.
Sector: Health Care Equipment & Services.
Target price is $71.20.Current Price is $69.49. Difference: $1.71 – (brackets indicate current price is over target). If RHC meets the UBS target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
