The Pathology Guild has agreed to accept cuts outlined in the government’s MYEFO in return for regulation being introduced on collection centre rents.
If the measures are successful at reducing collection centre rents Macquarie estimates the average rent could fall to $12,000 from $70,000 today.
Plenty of uncertainty persists which could prevent the companies realising the savings, the broker cautions. One area being the government not being re-elected at the July 2 election.
Macquarie retains a Neutral rating and $20 target.
Sector: Health Care Equipment & Services.
Target price is $20.00.Current Price is $21.39. Difference: ($1.39) – (brackets indicate current price is over target). If SHL meets the Macquarie target it will return approximately -7% (excluding dividends, fees and charges – negative figures indicate an expected loss).