Despite vaccination programs being rolled out globally testing rates for coronavirus have remained strong. Credit Suisse raises earnings assumptions to account for stronger testing volumes, estimating this will add $1.1bn or 43% to FY21 EBITDA.
The broker also continues to assume strong growth in Sonic Healthcare’s base business. Base business growth of 13% is anticipated in Australia in the second half and 10% in the US.
Credit Suisse maintains an Outperform rating and $40 target and expects more than a -$1bn reduction in net debt in FY21.
Sector: Health Care Equipment & Services.
Target price is $40.00.Current Price is $34.61. Difference: $5.39 – (brackets indicate current price is over target). If SHL meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
