Morningstar cuts Sonic Healthcare profit forecast on surging COVID-19 cases

Sonic Healthcare

03/07/2022 20:51

** Analysts at Morningstar say a higher level of COVID-19
transmission in the community will weigh on Australia's Sonic
Healthcare's  SHL.AX  near-term margins 
    ** They say SHL's costs are likely to rise on the back of
last-minute cancellations of surgery and imaging procedures with
the possibility of a staff crunch 
    ** Morningstar slashes co's FY22 underlying EBIT forecast by
5% to A$2.08 bln ($1.41 bln) but keeps FY23 EBIT outlook of
A$1.34 bln broadly unchanged 
    ** Says COVID-19 testing in Australia has declined broadly
in line with the brokerage's expectations to roughly 2 mln tests
in June 2022 from 7 mln tests in Dec. 2021; analysts expect the
downward trend to continue  
    ** "While we still expect COVID-19 testing volumes to at
least halve from current levels ... we remain confident that H2
FY22 was the nadir for Sonic’s base businesses" - Morningstar
    ** Seven of 16 brokerages rate the stock "buy" or higher,
eight "hold" and one "sell"; median PT A$38.73
    ** Stock down 29.4% this year, as of last close 
 ($1 = 1.4695 Australian dollars)

 (Reporting by Roushni Nair in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))