SHL – Morgan Stanley rates the stock as Overweight

By Broker News | More Articles by Broker News

The company has acquired Aurora Diagnostics, a US-based pathology business with pro forma revenue of US$310m and EBITDA of US$59m.

Morgan Stanley notes, as anatomical pathology is not subject to funding cuts, the deal dilutes some of the top-line risk in the US and increases the company’s US business representation to 28%.

The purchase price is US$540m, to be funded by a placement and bridging facility. Expected synergies are derived from cross selling opportunities between clinical and anatomical pathology.

Overweight. Target is $27.70. Industry view is In-Line.

Sector: Health Care Equipment & Services.

Target price is $27.70. Current Price is $21.39. Difference: $6.31 – (brackets indicate current price is over target). If SHL meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).

Broker News

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →