Following FY21 results, Credit Suisse estimates revenue was a -2% miss versus expectations. Overall revenue growth was partly offset by elevated employee, equipment and consumable costs driving an earnings (EBITDA) margin miss of -5%.
This results in downward forecast profit (NPATA) revisions of -6% for FY22 and FY23 by the broker. Management noted FY22 YTD trading is down around -5% versus prior expectations, which includes New Zealand down -75% versus estimates.
While the analyst expects the industry to return to normality from the second half, the company will be more reliant on organic growth, given elevated M&A multiples. The Neutral rating is unchanged and the target price falls to $4.65 from $5.
Sector: Health Care Equipment & Services.
Target price is $4.65.Current Price is $4.49. Difference: $0.16 – (brackets indicate current price is over target). If IDX meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
