Section 1.0. UK Healthcare Sector Landscape, Trends & SWOT Analysis

Section 1.1. Trends in the Healthcare Sector

The Healthcare sector comprises Companies involved in healthcare space including drug manufacturing, producing medical devices, supplying medical insurance services, patient care in medical-related products or services, among others. As Healthcare facilities are always going to be a necessity around the world, it is likely to be supported by the short-term and long-term growth catalysts and underlying drivers. Moreover, the Covid-19 pandemic induced funding in the healthcare sector has spread across various verticals of drug developments, modern testing facilities, research projects, and other healthcare products. Therefore, the investments made in R&D can offer growth opportunities for the next decade.

As per the Office for National Statistics, total healthcare spending was recorded £277 billion in 2021, representing a 7.4% nominal increase from 2020. Due to Covid-19 crisis, there is pressure on government budget to reinforce the importance as it is also a matter of national security. Moreover, the National Health Service (NHS) is confronting significant pressure of high demand and subsequent waiting lists. The Prime Minister, Rishi Sunak has also promised to ease pressure on the NHS and provide better healthcare services.

Section 1.2. SWOT Analysis

Section 2.0. Sector Risks & Opportunities

Section 2.1. Risk Exposures to Healthcare Sector

Section 2.2. UK Healthcare Sector Outlook

In the prevailing environment of monetary policy tightening, rising interest rates, the healthcare stocks can look defensive in nature as these Companies usually provide non-discretionary or inevitable services. The growing and ageing population has caused a surge in demand for hospitals over the past five years. However, the NHS budgets are not sufficient to cope with the rising demand as it has long wait times and is overcrowded. The private sector benefitted from this and expanded over the period.

After gaining insights into the Healthcare sector, we will look at the business model of two relevant players listed on the London Stock Exchange.

Section 3.0: AstraZeneca PLC (‘Buy’ at GBX 10,586.00, closing price as on 7 February 2023)

3.1 Company Details

3.2. Key Metrics in Pictures

3.3 Valuation and Technical Guidance

(Data Source: REFINITIV, Analysis done by Kalkine Group)

Section 4.0. Craneware PLC (‘Speculative Buy’ at GBX 1,465.00, closing market price of 7 February 2023)

4.1 Company Details

4.2. Key Metrics in Pictures

4.3 Valuation and Technical Guidance

(Data Source: REFINITIV, Analysis done by Kalkine Group)

Please note markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 7 February 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/ or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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