Sonic Healthcare – Valuation Review

Sonic Healthcare is under Algo Engine sell conditions, however, we take the time to look at the financial outlook of the business, following yesterday’s FY19 result.

FY19 sales revenue was up 11.6% and EBIT growth increased by 10%.

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Excluding any FX benefit, we expect Sonic to grow FY20 EBITDA at 6 – 8%, which will support a forward yield of 3.2%.

The stock is trading on FY20 PE of 23x earnings and we will look to buy SHL on the next Algo Engine buy signal.

 

 

 

 

Author: Leon Hinde

Leon has been working in the financial services industry for 18 years in management and advisory roles. Leon has extensive experience in general advice and dealings involving securities and derivative financial products.

PS 146 Securities & Derivatives, ADA 1 & 2 accreditation, Responsible Manager Certificate. Leon is authorised to provide financial product advice and deal with respect to the following financial products:

· Deposit Products
· Securities
· Derivatives
· Interest in managed investment schemes; and
· Government debentures, bonds and stocks