Sigma Healthcare looks set to enjoy an earnings boost on the back of a forthcoming contract with pharmacy chain Chemist Warehouse, expected to be executed in July 2024, as predicted by brokerages Citi and Jefferies.
The lucrative contract, for the supply of pharmaceutical benefits scheme medicines and fast-selling consumer goods, will run for a term of five years.
Jefferies has upgraded their price target (PT) for Sigma to A$0.85, up from A$0.81, while Citi holds steady with a PT of A$0.80.
Sigma projects an EBIT margin within the range of 1.5% to 2.5% over three to five years, which aligns closely with estimates by Citi and Jefferies of 1.5% and 1.9% in fiscal year 2026, respectively.
SentinelEr data reveals one out of six analysts are recommending the stock as a ‘buy’, and five are advising a ‘hold’, with a median PT of A$0.82.
As of the last close, Sigma’s stock is climbing this year, up by 23.8%.
Sigma Healthcare (ASX:SIG) is an Australian pharmaceutical company.