With the coronavirus outbreak continuing its spread across the world and the number of infections in developed markets growing rapidly, companies across the world are being impacted greatly.
In light of this, Goldman Sachs has decided to take a look at how ASX healthcare shares are faring from the outbreak. Here's what the investment bank found:
Companies that could benefit:
According to the note, Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) is a company that could be benefiting from the outbreak. It notes that the leading manufacturer of humidified ventilation products has recently upgraded its guidance for FY 2019. This was due in part to increased demand from China as a result of the coronavirus.
Goldman has also named CSL Limited (ASX: CSL) as a company that may experience an increase in demand. It notes that in severe respiratory indications, there is some chance of an increase in demand for convalescent plasma/immunoglobulins therapies. This is based on previous coronavirus outbreaks, including SARS, MERS, and the 2009 H1N1 flu pandemic. In addition to this, as the majority of CSL's therapies are used for conditions for which there are no real alternative treatments, it believes demand will not be negatively impacted by the outbreak.
Companies that could be negatively impacted:
The broker believes that Cochlear Limited (ASX: COH) could struggle during the outbreak. It notes that the largest supplier of cochlear implants has significant revenue exposure across many developed and emerging markets. Goldman appears concerned that further procedure deferrals because of the coronavirus could weigh on its performance.
Finally, Ramsay Health Care Limited (ASX: RHC) is another company which it is concerned could be negatively impacted. This is because it believes the private hospital operator could be impacted by increasing non-essential procedure deferrals and supply-chain disruption.
Though, the broker concludes, the extent of any impact will depend on the rate and severity of the virus outbreak. Which, at this stage, remains an unknown.
