Pro Medicus signed a 7-year contract for Visage 7 viewer and open archive worth $40m with Intermountain Healthcare. UBS estimates the contract represents $5.8-6.5m per annum at full volumes. Rollout is expected to commence in the third quarter.
UBS highlights Pro Medicus’s radiology pipeline conversion over 6 years is significantly above UBS’s estimate and suggests continuing momentum into the second half.
The broker views Pro Medicus as one of the highest quality companies in its coverage with earnings risk skewed to the upside from a materially higher pipeline conversion expected in FY21.
Neutral rating is reaffirmed with a target of $32.
Sector: Health Care Equipment & Services.
Target price is $32.00.Current Price is $36.53. Difference: ($4.53) – (brackets indicate current price is over target). If PME meets the UBS target it will return approximately -14% (excluding dividends, fees and charges – negative figures indicate an expected loss).