The broker thinks Sonic’s move into Belgium offers limited near term synergies, but the price appears to be relatively good and the apparent early stage of market consolidation has appeal, says Deutsche.
Given its increased debt facilities, Deutsche thinks Sonic is now well positioned to capitalise on its strong position in Germany and now Belgium.
However, there is no change to the price target given the lack of near term pay-off, with the benefits of consolidation now pushed into the future and thus near term returns diluted. The Buy call is maintained given the upside to the price target. Sector: Health Care Equipment & Services.
Target price is $15.00.Current Price is $14.43. Difference: $0.57 – (brackets indicate current price is over target). If SHL meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).