Animal health: J.P.Morgan sees sub-segment benefiting from pet care tailwinds

Heska

29/01/2021 10:57

** J.P.Morgan initiates coverage of Idexx Laboratories
 IDXX.O  and Heska Corp  HSKA.O  with "overweight" rating; views
companion animal diagnostic market as most attractive
sub-segment of animal health space 
    ** Currently, macro trends such as rising pet ownership and
pet humanization are significant growth drivers in diagnostic
utilization, which has further accelerated following pandemic -
brokerage
    ** Market-leader IDXX is ideally positioned to take
advantage of these industry tailwinds because of its
best-in-class product offering and strong commercial
infrastructure - JPM
    ** Brokerage also sees HSKA as major emerging player in the
space which brings in attractive opportunities with new product
cycle and its recent expansion into Europe
    ** JPM calls companion animal diagnostics market "highly
sticky", as vet customers are often locked into multi-year
contracts and rarely switch providers, offering annuity-like
sales visibility for the diagnostic manufacturers
    ** Brokerage sets PTs of IDXX at $570 and HSKA at $195;
median PTs are $500 and $151, respectively

 (Reporting by Tapanjana Rudra)
 ((Tapanjana.Rudra@thomsonreuters.com;))