Citi ups earnings forecast for Sonic Healthcare on COVID-19 testing demand, hikes PT

SHL-Japan

06/12/2021 24:32

** Citi says demand for PCR testing amid the spread of the
Omicron variant of the coronavirus is likely to drive up
earnings for Sonic Healthcare  SHL.AX  in FY22, raises PT to
A$44.00 from A$42.50
    ** We expect that the relatively low booster rates in the
developed world will result in continued demand for PCR testing
throughout 2022  - Citi
    ** For SHL, brokerage now forecasts COVID PCR revenue of
COVID PCR revenue of A$2.17 bln ($1.52 bln) for FY22, A$900 mln
for FY23 A$298 mln for FY24
    ** Guidance is significantly higher than previous forecast
of A$2.13 bln for FY22, $599 mln for FY23 and no COVID testing
for FY24
    ** Brokerage says only scenario which would result in
significantly lower PCR testing than forecast would if the
Omicron variant were highly contagious but results in
significantly less severe illness
    ** If this occurred, and it became the dominant global
strain over the next six months, the demand for PCR testing
could subside in 2HCY22 - Citi


($1 = 1.4273 Australian dollars)
    

 (Reporting by Arundhati Dutta in Bengaluru)
 ((Arundhati.Dutta@thomsonreuters.com;))