Jefferies bullish on Australia's Sonic Healthcare, sees growth from COVID-19 testing

SHL Telemedicine

18/02/2021 19:49

** Jefferies upgrades its rating on Sonic Healthcare
 SHL.AX  to "buy" from 'hold' and raises its target price to
A$40.00 from A$35.10
    ** On Thursday, the medical diagnostics services provider
reported a more than two-fold jump in H1 profit and said it
expected a strong H2 result based on revenue growth trends in
Jan and Feb  urn:newsml:reuters.com:*:nL4N2KO0DA
    ** Brokerage increases SHL's FY21 and FY22 EPS forecast by
65% and 34% respectively; sees impact of COVID-19 testing to
bode well for SHL's overall volume of clinical lab testing into
FY22 and lead to strong growth 
    ** Citi Research says high level of COVID-19 testing for
longer will remain a key upside risk for SHL 
    ** "We acknowledge a near-term COVID earnings bump, but note
that SHL continues to generate cash - this raises the
possibility of corporate activity over the medium term, which
may be seen positively" - Jefferies 
    ** Among the 12 analysts that cover SHL, current average
rating on the shares is "buy"; their median PT is A$38.35 –
Refinitiv data
    ** As of last close, stock up 5.6% this year 

 (Reporting by Shriya Ramakrishnan in Bengaluru)
 ((Shriya.Ramakrishnan@thomsonreuters.com;))