Morgan Stanley increases earnings estimates, expecting benefits from ongoing coronavirus testing and a recovery in base business volumes.
For now, the broker assumes testing ends in December 2021 with a minimal contribution from US serology testing in 2022. Morgan Stanley believes the strength of the balance sheet is under appreciated by the market. Covid-19 testing has also driven gearing to record lows.
The broker retains an Overweight rating and raises the target to $39.80 from $39.70. Industry view: In-line.
Sector: Health Care Equipment & Services.
Target price is $39.80.Current Price is $35.21. Difference: $4.59 – (brackets indicate current price is over target). If SHL meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).