IDX – Morgan Stanley rates the stock as Equal-weight

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The company has completed the acquisition of Imaging Queensland for consideration up front of $104m. Morgan Stanley already includes the associated capital raising in forecasts and now includes the earnings associated with the acquisition.

Target is raised to $3.40 from $3.12. Equal-weight rating maintained as the PE multiple looks full.  Industry view: In-Line.

The broker suspects the market will continue to pay a premium for the stock given the upside risk associated with reduced balance sheet leverage and a track record of accretive acquisitions.

Sector: Health Care Equipment & Services.

Target price is $3.40.Current Price is $3.60. Difference: ($0.20) – (brackets indicate current price is over target). If IDX meets the Morgan Stanley target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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