Morgan Stanley has indicated positive projections for healthcare services provider Ramsay Health Care (ASX:RHC).

The financial services company anticipates improvement in the earnings margin for Ramsay, attributing this to possible reductions in labour supply constraints and the implementation of cost-saving initiatives.

The brokerage has subsequently raised the price target for Ramsay Health Care’s shares from A$49.6 to A$53.6.

An increase of 18% in the FY24E earnings per share (EPS) and a 40% growth in the FY25E EPS are also forecasted.

Additionally, the growth for FY25E is expected to be propelled by improved EBITDAR margins in Australia and France.

This optimism extends to a recovery in France’s earnings margins, with projected underlying EBITDAR margins of 14% in 2H23, increasing by 60bps in FY24E, 130bps in FY25E, and thereafter by 30bps per annum.

Out of 16 analysts reviewing Ramsay Health Care, three have rated the stock as ‘buy’, twelve as ‘hold’, and one as ‘sell’, with a median price target of A$55.95, according to LSEG data.

Year to date, Ramsay Health Care’s shares have declined 20.7% as of the last close.

Ramsay Health Care (ASX:RHC) is a prominent provider of healthcare services.