** Shares of Australia's Ramsay Health Care RHC.AX fall as much as 1.4% to A$34.14

** Morningstar says RHC shares are now trading at about a 40% discount to its A$62 fair value estimate; says shares are undervalued

** Investment research firm retains its earnings estimates for the healthcare provider till FY29

** Says while margins are constrained by digital expenses in the near term, it expects this to drive cost efficiencies in longer term by optimising staff levels and reducing administrative paperwork

** Says expects margin expansion as activity trends in higher-margin work recover and staff availability increases

** Forecasts FY25 underlying EBIT to grow by 5% to A$1.09 bln ($678.20 mln)

** RHC fell 34.3% in 2024

($1 = 1.6072 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru)

((Rishav.Chatterjee@thomsonreuters.com;))