Source: Sharecast
Berenberg said it believes Spire Healthcare to be on track to deliver mid-single-digit revenue growth and £30.0m of cost savings in FY25, which it noted looks "even more credible" after the group announced headcount adjustments in May.
The German bank expects revenue growth to be evenly weighted between H1 and H2, including mid-single-digit growth in hospital revenues and high-single-digit growth in primary care.
Based on management guidance, Berenberg expects the bulk of Spire's cost savings to be realised in H2, and said it assumes a £10.0m hit related to headcount adjustments.
"As we tweak up our cost savings assumptions, adjust finance costs and factor in the sector re-rating from March to now, our price target moves up to 280.0p," said Berenberg, which reiterated its 'buy' rating on the stock.
Berenberg also highlighted that with the stock trading on a 6.9x FY26 enterprise value/underlying earnings ratio for double-digit earnings per share growth, Spire's valuation "looks compelling".
Reporting by Iain Gilbert at Sharecast.com