MS lowers Sonic Healthcare U.S. COVID-19 testing forecast; downgrades

SHL-Japan

04/05/2021 04:41

** Morgan Stanley downgrades medical diagnostics co
 SHL.AX ; reduces U.S. COVID-19 testing volume assumptions after
co's U.S. peers lowered testing forecast
    ** Brokerage lowers SHL's PT to A$38.60 from A$39.80 
    ** Says SHL's testing numbers for March-quarter were above
expectations in U.S., Australia and Germany, but slightly behind
expectations in UK
    ** MS moderates expectations for SHL in market and trims EPS
estimates after Q1 results from U.S. peers Quest Diagnostics and
Labcorp stated they expected COVID-19 testing to be down 30%-50%
below 2020 in 2021
    ** Lowers U.S. revenue forecasts by 7%, 10% and 3% for FY21,
FY22 and FY23, respectively
    ** Trims EPS estimates by 4%, 6% and 2% for FY21, FY22 and
FY23, respectively
    ** Of the 13 analysts who covered the stock, six rate it
"buy" or higher, six rate "hold" and one rates "sell"; median PT
is A$36.74 – Refinitiv data
    ** Shares of Sonic Healthcare fall as much as 1.3% to
A$35.25, their lowest since April 21
    ** Stock has added 11.1% so far this year, as of last close,
compared with 0.3% loss in  .AXHJ  index


 (Reporting by Riya Sharma in Bengaluru)
 ((Riya.Sharma@thomsonreuters.com;))