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Highlights

  • Sector Growth Outlook: Healthcare services expected to expand, driven by rising bulk billing and potential government incentives.

  • Forecasted Revenue Growth: Diagnostic imaging projected to grow 10% in FY25, pathology by 6%, and assisted reproductive services by 2.5%.

  • Stock Forecasts Maintained: Jefferies reaffirms its outlook for Healius, Integral Diagnostics, Monash IVF, and Sonic Healthcare.

Despite an 8.1% decline in the ASX Healthcare Index, Jefferies remains optimistic about the medium-term growth prospects for Australia's healthcare services sector. The brokerage firm attributes this positive outlook to rising bulk billing rates and potential new government incentives, which could provide further financial support to the industry.

Sector-Wide Growth Projections

Jefferies has maintained its revenue growth forecasts for key healthcare sub-sectors in FY25, projecting:

  • 10% growth in diagnostic imaging services, driven by increased patient demand and expanding infrastructure.

  • 6% growth in pathology, despite previous declines in bulk billing rates affecting clinical lab volumes.

  • 2.5% growth in assisted reproductive services, reflecting stable demand trends.

While the recent decline in General Practitioner bulk billing rates has led to lower clinical lab volumes, Jefferies notes signs of a reversal in this trend, which could support sector recovery.

Stock Outlook and Market Reaction

Jefferies maintains its forecasts for leading healthcare service providers, including:

While the broader healthcare index remains under pressure, Jefferies believes that the sector’s fundamentals are positive, with long-term growth drivers still intact.