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A mid-cap stock with a very healthy outlook

The company is benefiting from the struggles of the UK's public healthcare system
A mid-cap stock with a very healthy outlookPublished on September 19, 2024

NHS waiting lists are at eye-watering levels. More than 7.6mn people are currently waiting for procedures and appointments, and around 4mn people are waiting for care. It is no wonder that patients are going private in record numbers. In the first three months of 2024, independent admissions were the highest ever recorded on a quarterly basis, according to the Private Healthcare Information Network. 

Tip style
Growth
Risk rating
Medium
Timescale
Medium Term
Bull points
  • Earnings expected to jump
  • Rising demand for private healthcare 
  • Medium-term targets reiterated
  • Cost-saving plans on track
Bear points
  • Highly leveraged
  • Recent growth driven by M&A
  • Staff retention headache

Spire Healthcare (SPI) is taking advantage of this. The private healthcare operator runs 39 hospitals and more than 50 clinics, medical centres and consulting rooms across England, Scotland and Wales, and is the leading private provider of knee and hip operations in the UK. It is not just attracting individuals; the NHS is also turning to it to help deal with the backlog. This leaves Spire well-positioned to grow earnings in the coming years, although there are risks that investors need to consider. 

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