Fisher & Paykel Healthcare ((FPH)) may be a blue-chip NZ company capable of producing mid-teens organic growth for the next 3-5 years but the significant run-up in its share price suggests it is over-bought.
Fisher & Paykel Healthcare (FPH) delivered a strong first half result, upgrading guidance and signalling robust growth in its hospital applications. Yet the company is hindered by a patent dispute with ResMed ((RMD)), which could put a dampener on the stock until it is resolved.
Fisher & Paykel Healthcare's results were in line with expectations. Hospital division revenue grew 11%, supported by new applications. Homecare was also better than Citi expected, amid strong device growth.
UBS observes the share price is up 30% since the FY17 result in May. The broker suggests that the risk is skewed to the downside, especially if OSA patent disputes or NAFTA negotiations do not go to plan and growth slows.
Deutsche Bank assesses a Labour-led government in New Zealand could be a net positive for the company. Aside from a potential impact on the NZ dollar, which is weaker so far during the election campaign and therefore a positive, the main change would be the incentives for R&D.