Citi resumes coverage on Australia's Integral Diagnostics with "neutral" rating

Integral Diagnostics

22/12/2024 19:45

** Citi resumes coverage on medical imaging services
provider Integral Diagnostics  IDX.AX  post its merger with
local contender Capitol Health  CAJ.AX  with "neutral" rating at
a price target of A$3 per share
    ** Brokerage sees the merger to maintain IDX's earnings per
share stability and potential uplift from the disclosed $10 mln
in net synergies
    ** Adds that despite enduring demand for radiology, the firm
has reported its profit margins to contract due to wage
inflation and muted volume growth
    ** Citi sees organic revenue growth of +7.5% for FY25 and
+6.5% per annum thereafter, expecting a 400 basis point EBITDA
margin expansion by FY28, implying a 33% EPS compound annual
growth rate between FY24 and FY27
    ** 11 of 12 analysts rate the stock "buy" or higher, one
"hold"; their median PT is A$3.34 – LSEG data
    ** IDX stock up around 57.5% YTD as of last close

 (Reporting by Kumar Tanishk in Bengaluru)
 ((Tanishk.Kumar@thomsonreuters.com;))