Markets with Madison: Analysts eyeing Fisher & Paykel hit, upside for aged care

Fisher & Paykel Healthcare shares could be in line for a hit and aged care companies in for a much-needed share price boost this reporting season, if retirement sector leaders prove they can generate more cash and keep a lid on debt and costs, Forsyth Barr analysts say.

Investors have sold out of the aged care sector recently, devaluing the listed names by around 25 per cent in the past year, as falling property prices and interest rate rises hurt their balance sheets - but they were due some optimism.

“If they have boring results, that could definitely be enough to be even a small-ish catalyst to push them a bit higher,” senior equity analyst and director Aaron Ibbotson said on Markets with Madison.

But house price declines and interest rate increases were still a worry, and the market’s tolerance for higher debt levels was limited, he explained.

On the flipside, he said Fisher & Paykel Healthcare was extraordinarily overvalued and in need of a re-rating, so its share price could take a hit this season.

Listed property was another poor performing sector, and would no doubt hit headlines over the next few weeks with six companies reporting financial results.

Jarden head of research Arie Dekker said the property stocks were trading at “pretty substantial discounts” after revealing portfolio valuation losses of between 5 and 10 per cent this year.

Dekker explained how much pressure that put on their balance sheets, and what options were available to a property industry “in limbo”, on today’s episode of Markets with Madison.

Get investment analysis and insights from the experts on Markets with Madison every Monday and Friday on the NZ Herald.

Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.