Credit Suisse suggests the closure of the Fowler Simmons transaction just ahead of the current crisis puts the focus on the balance sheet at a time when it was showing some sign of turning around.
The broker expects fourth quarter revenues will be down -35%, given the exposure to GP referrals and musculoskeletal work.
Nevertheless, the business does operate in an industry that is growing at around 5-7% per annum and one week customer bills are paid within two days.
Going forward, Credit Suisse suggests this is the type of industry that lending syndicates will support. Outperform rating maintained. Target reduced to $0.26 from $0.34.
Sector: Health Care Equipment & Services.
Target price is $0.26.Current Price is $0.18. Difference: $0.08 – (brackets indicate current price is over target). If CAJ meets the Credit Suisse target it will return approximately 31% (excluding dividends, fees and charges – negative figures indicate an expected loss).
