Fisher & Paykel Healthcare stock rated Neutral by UBS, sees growth driven by HFT adoption By Investing.com

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Fisher & Paykel Healthcare stock rated Neutral by UBS, sees growth driven by HFT adoption

Published Nov 29, 2024 10:52

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Fisher & Paykel Healthcare stock rated Neutral by UBS, sees growth driven by HFT adoption

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On Friday, UBS updated its price target for Fisher & Paykel Healthcare (FPH:NZ) (OTC: FSPKF), lifting it to NZD38.10, up from the previous NZD36.00. Despite the increase, the firm has decided to maintain a Neutral rating on the stock. The adjustment reflects UBS's view of the company's anticipated earnings growth and its position in the market.

According to UBS, Fisher & Paykel Healthcare's share price accurately represents the company's strong earnings per share (EPS) growth, which is expected to continue at a compound annual growth rate (CAGR) of 25% from the 2025 fiscal year onwards. This growth trajectory is attributed to the increasing adoption of high flow therapy (HFT), gains in the obstructive sleep apnea (OSA) mask market share, and anticipated margin expansion.

The analyst from UBS highlighted that the wider utilization of HFT in hospitals is likely to be bolstered by the ongoing 'COVID halo effect' and the enhanced patient benefits delivered by new product offerings. Furthermore, it is expected that Fisher & Paykel Healthcare will retain a price-to-earnings (P/E) premium approximately 50% higher than that of its Australasia (ANZ) large-cap healthcare peers, due to its superior EPS growth prospects.

Looking ahead, UBS suggests that any potential upside in Fisher & Paykel Healthcare's share price could stem from a valuation based on higher future EPS or from the opportunities presented by the home HFT market. The latter, according to UBS's estimates, could contribute an additional value of $3-5 per share to the company.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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