As you know, one of my core views is that many perceived ‘defensive’ stocks will not prove defensive in share price terms, as the interest rate cycle turns up. I am most cautious on the Healthcare and Infrastructure sectors and that’s where my AIM Global High Conviction Fund has the majority of its short positions.
Regular readers would know I have been bearish on market darling Ramsay Healthcare for the last 18 months. That caution is proving warranted, with RHC’s interim earnings missing at every level and leading to consensus downgrades of 3-5%. RHC shares fell another -6% yesterday after reporting. That is not “defensive” and I continue to target a $54.00 share price for RHC, a further -15% decline from here.
Despite RHC’s share price weakness and earnings downgrade cycle, the analysts still look at this stock historically. There are currently 5 buys, 6 holds and 0 sell recommendations and the consensus share price target is $77.00.