Citi cuts Fisher & Paykel Healthcare’s FY23 and FY24 EPS forecasts by -11% and -13%, anticipating lower hospital sales of covid-related products such as humidifiers and high-flow equipment.
Given many years of demand were pulled back into two years, Citi says estimates are difficult, but the main question is how much revenue can the company now generate from the covid sales windfall.
Citi says while FY23 is a tough one to nail, it believes the business fundamentals of large, underpenetrated markets, limited competition and high margins are solid and believes the recent share-price retreat offers a good entry point for investors.
Buy rating retained. Target price falls to NZ$24 from NZ$25.75.
Sector: Health Care Equipment & Services.
Current Price is $18.29. Target price not assessed.