Analysts at Citi and Jefferies anticipate a slight increase for Australian medical diagnostics firm Sonic Healthcare (ASX:SHL)’s earnings post 2025.
The financial analysts project that the company may bolster its earnings with new business acquisitions and persistent growth from its existing business, even as the profit spike from the COVID-era begins to dwindle.
Sonic Healthcare reported a 53% drop in FY23 net profit to A$685 million, with its COVID-19 related revenue plummeting by 80% to A$485 million.
From FY19 to FY24, Jefferies foresees a 3.7% compound annual growth rate for the company’s revenue.
Jefferies has decided to lower their price target to A$34.50 from A$36.60 due to a bleak outlook on health comparable multiples but maintains a ‘hold’ stance.
Citi has also reduced their price target to A$38.00 from A$40.50 but continues to support a ‘buy’ rating.
Citi speculates that potential benefits from the application of artificial intelligence and growth in the radiology sector may buoy Sonic Healthcare’s earnings in FY25 and beyond.
Out of 18 analysts, seven rate Sonic Healthcare as a ‘buy’ or higher, four assign it a ‘hold’ status and seven suggest a ‘sell’ or lower; their median price target being A$35.45.
Sonic Healthcare is an Australian medical diagnostics company specializing in pathology, radiology, and clinical services.