Significant expansion of multiples since the FY14 results means the stock is now on a FY15 price/earnings ratio of 32 times which JP Morgan finds difficult to justify, given the intensifying competition.
The broker retains an Underweight rating but is on the watch for a favourable resolution of CMS reimbursement issues, while processor upgrades will be an important metric in the first half. Target is raised to $61.70 from $58.15.
Sector: Health Care Equipment & Services.
Target price is $61.70.Current Price is $83.36. Difference: ($21.66) – (brackets indicate current price is over target). If COH meets the JP Morgan target it will return approximately -35% (excluding dividends, fees and charges – negative figures indicate an expected loss).