Investment group Forsyth Barr says Fisher & Paykel Healthcare shares are overpriced at current levels and could come back by about $10 over the next 12 months as the world moves to more "industry growth
Fisher & Paykel Healthcare overvalued at current price - Forsyth Barr
Beneficiaries of covid-19
One of those peers is NYSE and ASX-listed Resmed, a provider of cloud-connectable medical devices for the treatment of sleep apnoea and obstructive pulmonary disease.
Leadbetter said both companies were "direct beneficiaries of the covid-19 pandemic," with Resmed reporting a material spike in ventilator orders, which contributed about 4.5 per cent to its third-quarter revenues.
Resmed results were also ahead of consensus, up 17 per cent, which was indicative of market share gains across both masks and flow generators, she said.
Longer-term, there was also upside risk from greater adoption for F&P Healthcare's new applications with its hospital segment, "albeit there is risk the competitive landscape is heightened given the current focus of a number of companies in this area."
Leadbetter said homecare dealers had been spoiled for choice, with a suite of new products over the past 12 months in which Resmed had been particularly active and successful. F&P Healthcare was now looking to play catch up "to drive a rebound in growth in its sleep segment."
This could be helped, however, by two recent new mask launches.
Leadbetter is forecasting F&P Healthcare to report a net profit of $278.5 million from revenues of $1.2 billion for the financial year.
At her target price of $18.50, F&P Healthcare's share price return is negative 34.7 per cent, with a net dividend yield of 1.3 per cent.
- BusinessDesk