The acquisition of MedicalDirector is a sign of Telstra’s ambitions in health and it will not affect the return of Telco proceeds to shareholders, UBS observes. Telstra will acquire the business, which is a software service provided to GPs and pharmacies, for $350m.
The broker notes the financials for the acquisition as well as the previous PowerHealth acquisition have not been provided, although understands MedicalDirector is profitable and likely to be accretive to earnings. Neutral rating and $3.90 target maintained.
Sector: Telecommunication Services.
Target price is $3.90.Current Price is $3.82. Difference: $0.08 – (brackets indicate current price is over target). If TLS meets the UBS target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
