SHL’s FY24 earnings guidance led to downgrades of around 8%, which initially saw the stock spike under $24. However, it has recovered strongly, trading close to levels before the result. Cost pressures have been the issue for SHL, with too many collection sites and staff costs the main issue, though we see these improving over the coming 12 months. To become more bullish towards SHL, we would need to believe that substantial operating performance improvement can be delivered in FY25 and not pushed into FY26 / beyond – we need a bit a bit more comfort around this before pressing the button.
- We believe value is returning to SHL, but there’s no catalyst suggesting we should buy today.
MM is cautiously bullish towards SHL around $26
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