Credit Suisse raises FY22 estimates for earnings per share by 9% because of higher coronavirus testing rates in Australia. The broker forecasts the testing will contribute $1.2bn in revenue in the first half of FY22.
Credit Suisse now assumes reimbursement rates continue into 2022, unlikely to be cut with the election due next year. The broker also highlights FY23 estimates are not factoring in the full upside from international travel testing.
Australian testing assumptions for coronavirus in FY23 account for around 7% of Sonic Healthcare’s Australian pathology revenue.
Outperform retained. Target rises to $46.50 from $45.00.
Sector: Health Care Equipment & Services.
Target price is $46.50.Current Price is $42.32. Difference: $4.18 – (brackets indicate current price is over target). If SHL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
