Australia's Aroa Biosurgery falls to record low as Bell Potter cuts TP

Aroa Biosurgery

31/01/2024 01:18

** Shares of medical products manufacturer Aroa Biosurgery
 ARX.AX  fall as much as 11.3% to a record low of A$0.550
    ** Analysts at Bell Potter reduce target price to A$0.90
from A$1.15; maintain "buy" rating
    ** Analysts believe FY24 guidance downgrade driver is
weaker-than-expected revenue recognition from product shipped to
TELA Bio segment
    ** Aroa Biosurgery on Tuesday reduced total revenue guidance
to NZ$67 mln-NZ$70 mln ($41.06 mln-$42.90 mln) for FY24
    ** Bell Potter expects revenues to resume higher growth in
FY25 with key assumptions being 70% growth in Myriad segment
revenues and 35% growth in TELA Bio segment revenues
    ** Brokerage says it continues to assume co will reach
breakeven in FY25 with earnings growth accelerating in FY26
    ** Stock had fallen 25.3% YTD, as of last close
    
($1 = 1.6316 New Zealand dollars)

 (Reporting by Shivangi Lahiri in Bengaluru)
 ((shivangi.lahiri@thomsonreuters.com))