Bank of America polled 23 investors between April 22 and April 29 to gauge sentiment on Brazil's healthcare industry and found a notable uptick in positioning toward the sector. The proportion of investors reporting an overweight stance climbed sharply to 77% from 39% in the fourth quarter of 2025, reflecting a shift back into healthcare assets.
Rather than moving into the sector broadly, respondents described a targeted rotation toward companies they deem to offer higher quality and greater visibility on earnings. That selective approach is constraining broad-based bullishness, as many investors prefer names that provide clearer short- to medium-term performance visibility.
Competitive dynamics remain a central concern. Several surveyed investors singled out pressure from Amil as an important factor, saying it disproportionately affects Hapvida and also raises strategic questions for SulAmerica. Those competitive pressures, combined with elevated valuations across some names and a perceived absence of clear catalysts, limit the appetite for a more aggressive sector stance.
Among individual companies, Rede D'Or emerged as the survey favorite. Investors showed broad confidence that hospital margins will recover in 2026 and that earnings growth will remain resilient into 2027. Supporting that view, 73% of respondents expect margins to be higher in 2026 compared with 2025, a recovery they attribute in part to improving occupancy levels.
On the topic of medical loss ratios, survey participants expect some near-term deterioration on a quarter-over-quarter basis. However, only 26% of those polled anticipate that deterioration will exceed 100 basis points, indicating limited concern for a severe jump in loss ratios among the majority of respondents.
Sentiment toward Hapvida is distinctly negative in the survey. While investors welcomed recent management changes at the company, 86% said they are waiting for tangible operating improvement, with particular focus on reductions in the medical loss ratio. A substantial share of respondents - 77% - expect a partial disposal of Hapvida's South region operations, although most foresee such a sale occurring at a discounted valuation. Liquidity and leverage also remain points of concern, with half of those surveyed flagging these issues.
Overall, investors expressed a preference for businesses with clearer earnings visibility, stronger balance sheets and actionable self-help measures. In addition to Rede D'Or, Odontoprev was cited as an example of the type of company attracting investor interest under these criteria.
Key takeaways
- Overweight positioning rose to 77% from 39% in Q4 2025 among 23 investors surveyed April 22-29.
- Investors are favoring companies with quality attributes and visible earnings over broad sector exposure; Rede D'Or and Odontoprev cited as examples.
- Competitive pressure from Amil is a major concern, with Hapvida disproportionately affected and implications for SulAmerica noted.
Risks and uncertainties
- Heightened competitive intensity - particularly from Amil - could pressure margins and market share for companies such as Hapvida and SulAmerica, affecting healthcare-sector earnings.
- Valuations and the absence of clear near-term catalysts may restrain further bullish repositioning by investors, limiting upside for the sector.
- Potential disposals at discounted valuations and ongoing liquidity and leverage concerns, especially at Hapvida, pose execution and balance-sheet risks.