Canaccord Genuity has reduced the price target on Australia’s Capitol Health (ASX:CAJ) from A$0.30 to A$0.27.

The analysts report that the FY23 results for the healthcare services provider met expectations, yet the path to margin recovery remains unclear.

In the near term, the brokerage foresees a rise in interest expenses for Capitol Health.

Moreover, the company is viewed as a potential buyout target.

Consistent margin strains are seen across the diagnostic imaging sector, where consolidation is likely one of the primary ways to cope with an increasing cost base, according to Canaccord.

The stock value of Capitol Health had dropped by 26.6% over the year up till the recent market close.

Capitol Health is a healthcare services provider, mainly in the field of diagnostic imaging.