Sonic Healthcare Eyeing German Expansion

For those companies with the money to spend on acquisitions the global financial crisis has opened up a range of opportunities, as potential purchases are now valued at far less than was the case prior to the downturn. As an example, Southern Cross Equities points to Sonic Healthcare (SHL), as it estimates potential acquisitions that were trading on 8-9 times EBITDA (earnings before interest, tax, depreciation and amortisation) are now available for around 5-6 times.

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SHL – ABN Amro rates the stock as Hold

The result was slightly below consensus but solid nevertheless, the broker reports. Sonic has picked up market share and management has reaffirmed better than 10% expected growth for FY09. A successful consclusion to the next Australian Pathology Memorandum of Understanding is a positive catalyst to look forward to in May, the broker notes. Target falls from $14.20 to $13.50. Sector: Health Care Equipment and Services.

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