Demand for rapid antigen tests has seen Sigma Healthcare upgrade its earnings guidance range to 10-15% year-on-year growth, which Credit Suisse notes implies a $20m earnings benefit since its last guidance upgrade in early December.
Initial full year guidance of 5% year-on-year earnings growth, was updated to a -10% year-on-year decline in early December. Expect January surge demand for rapid antigen tests to be a one-off, but earnings tailwinds could benefit through FY23.
Credit Suisse increases earnings forecasts 25% to $93m in FY22, and 12% to $95m in FY23.
The Neutral rating and target price of $0.53 are retained.
Sector: Health Care Equipment & Services.
Target price is $0.53.Current Price is $0.51. Difference: $0.02 – (brackets indicate current price is over target). If SIG meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
