Raffles Medical: Deutsche downgrades to Sell with TP of $1.76 based on DCF, notes that despite grp’s 3Q10 earnings growing by 13% YoY, it was still 5% below expectations. Highlights concerns of a slowdown in healthcare demand and increasing competition which could drive up healthcare costs, with latests MOH figures showing a slowdown in healthcare demand….
Adds that stocks valuations are rich, trading at a 27x P/E, a 30% premium to its peers and above its historical P/E of 20x, with scope for disappointment and downsides risks to earning expectations….
Technically prices are sitting just above its support trend line as well as its 50-day SMA and prices need to hold above the $2.16 level for any chance to retest high of $2.37. Break below $2.16 could see prices fall towards $2.00.
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