Sonic has announced an acquisition in Germany and BA-ML analysts comment this is exactly what the market wanted to see as Germany offers the highest potential in synergies. Post this deal, which is believed to be immediately accretive, the analysts do believe further acquisitions are less straightforward and this pops up the question: where else to deploy balance sheet strength?
Due to unfavourable US dynamics, BA-ML remains cautious on the stock, but the analysts make the effort in highlighting they are by no means bearish, suggesting any downside potential for the share price is rather small. Price target moves up to $15.45 from $15.20 prior on various adjustments, including the German acquisition.
Neutral rating retained. Note dividend forecasts have been nudged higher.
Sector: Health Care Equipment & Services.
Target price is $15.45.Current Price is $15.94. Difference: ($0.49) – (brackets indicate current price is over target). If SHL meets the BA-Merrill Lynch target it will return approximately -3% (excluding dividends, fees and charges – negative figures indicate an expected loss).