Sonic Healthcare (SHL)
Looking to diversify into health care and wanted your opinion on SHL now the post Covid bad news has worked its way through the system. Really appreciate your insights David Lennox Head
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Answer
Hi David,
Sonic Healthcare has faced financial challenges in 2024, marked by a reduction in its earnings forecast. Although the company experienced robust topline growth, it encountered inflation-driven cost pressures and delays in aligning labor costs with post-pandemic conditions.
However, this months AGM by SHL was well received pushing the stock to fresh 6-months highs. The board discussed growth in its base business and its expanding global footprint across seven countries, reporting 9 billion in revenue for FY24, though net profit slipped to $511mn due to the anticipated drop in COVID-19 testing volumes. Revenue growth is tracking 8% above 1H consensus, while they reaffirmed EBITDA guidance.
We like the healthcare sector into 2025 with SHL offering value after its ~10% decline year-to-date, the financial worm appears to have turned and we like the risk/reward while the stock holds above $28.
- We continue to like the look of SHL as a turnaround/recovery healthcare play.
