Citi slashes FY23 EPS forecast, PT for Sonic Healthcare

Sonic Healthcare

18/11/2022 24:05

** Citi reduces its FY23 EPS forecast for Australian medical
diagnostic firm Sonic Healthcare  SHL.AX  by 8%
    ** Cuts price target to A$34.00 from A$34.50, maintains
"neutral" rating 
    ** Brokerage increases its FY24 and FY25 EPS outlook by 2%
and 1%, respectively
    ** Forecasts base business growth of 8% in FY23, 5% in FY24
    ** Assumes SHL's EBIT margins to return to pre-COVID levels
in FY25
    ** Brokerage sees no COVID-19 revenue for FY23, SHL expects
"significant ongoing COVID testing revenue"
    ** We expect the market to look through the COVID-impacted
1H23 result and to focus on the base business recovery and
post-covid margins given the inflationary environment- Citi
    ** Six of 15 analysts rate the stock "buy" or higher, five
"hold" and four "sell" or lower; their median PT is A$34.78 –
Refinitiv data
    ** Stock down ~30% this year, as of last close 
 (Reporting by Echha Jain in Bengaluru)
 ((Echha.jain@thomsonreuters.com))