Health plan operators and laboratory networks should be highlighted in the 3rd quarter, says BofA

After analyzing the second quarter results and data from the ANS (National Supplementary Health Agency) Covid-19 Bulletin for July, Bank of America’s team of analysts bets on health plan operators and laboratory networks as the winners. of the third quarter, according to a report distributed this Monday (29).

Among the numbers reported by healthcare companies in the second quarter, analysts highlight occupancy rates, which indicate normalized dynamics; resilience in the volume of diagnostic tests; and the still challenging scenario for hospitals in terms of average ticket.

Regarding the Covid-19 Bulletin, released by the ANS on July 26, BofA highlights the constant growth in the number of health plan beneficiaries, up 0.3% in July, compared to the previous month; the reduction to 84% in the average loss ratio, against 87% in the second quarter; and the 1 percentage point drop in the hospital occupancy rate.

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“As a result, we are positive for the third quarter, especially for health plan operators and laboratory networks, segments that should continue to show sequential improvements,” wrote analysts Fred Mendes, Gustavo Tiseo, Mirela Oliveira and Lucca R. Brendim. .

Hospital networks, in turn, should continue to be in difficulty, according to BofA’s analysis. Analysts expect Rede D’Or (RDOR3), Mater Dei (MATD3) and Dasa (DASA3) to report a drop in the occupancy rate, as the second quarter tends to be seasonally stronger, causing margins to fall .

On the positive side, the bank expects these companies to be able to pass on higher costs to health plan operators, raising their average tickets between 5% and 10% year-on-year. At the same time, they should be able to reduce material and drug costs, which may partially offset the deterioration in margins in the coming quarters.

Among health plan operators, the main positive highlight should be Hapvida (HAPV3), which should continue to record growth in the number of beneficiaries and a reduction in claims. “We project monthly organic growth above 1% and expect the loss ratio to stay below the second quarter level, continuing the margin recovery,” the report says.

Read more:
Hapvida (HAPV3) overcomes mistrust and rises more than 30% in August – but is optimism here to stay?

Another plan operator that should do well in the short term is Odontoprev (ODPV3), which also boasts accelerated organic growth and low claims, according to analysts. This, together with the reduction of acquisition costs, should allow a positive dynamic for the company’s results in the second semester, in the view of BofA.

The scenario is not so positive for Qualicorp (QUAL3), which has been facing challenges to resume its growth, according to the bank – which could become even more difficult in the second half of the year, due to readjustments in plan prices.

Among the laboratory networks, BofA highlights Fleury (FLRY3), “resilient in the midst of general uncertainty in the sector”. “In contrast to the risks of organic growth and claims affecting other segments, Fleury’s track record and the Covid-19 Bulletin demonstrate a strong trend for exam volumes”, write the analysts, who expect stable margins in the next quarter.

Finally, the manufacturer and distributor of medical products Viveo (VVEO3) should continue to be pressured by the performance of recently acquired companies, especially Profarma Specialty, which operates with much lower margins than the rest of its portfolio. BofA expects this effect to begin to dissipate next year, when the company should be able to resume its margin expansion.

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