HMC –5.8%: was weaker today after CEO David Di Pilla provided a trading update at the Macquarie Conference and downgraded FY25 earnings. The asset manager now forecasts Earnings Per Share (EPS) of 66c, below the 70c projected a month ago in the half-yearly update.
The CEO also confirmed advanced talks with multiple alternative hospital operators to re-tenant the facilities owned by HMC’s Healthcare & Wellness REIT (HCW). This could turn out to be a major positive once the downside risk of a Healthscope collapse is discounted from the pricing of the stock – though clearly this will be a long, complex and clunky process to re-tenant the hospitals if this is the route they ultimately take.
Despite the earnings revision, expectations for a $0.12 per share dividend in FY2025 were reiterated, and the balance sheet remains strong with A$675 million in committed funding line – while risks are elevated until the Healthscope transaction is resolved, the business remains robust.
MM is long and bullish HMC
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