Sonic Healthcare (SHL) Stock Recommendation

Sonic Healthcare (SHL) has a Buy stock recommendation and a 12 month share price target of $15.21 from stock analyst Citigroup Investment Research (CIR) who have initiated coverage. Sonic is a story about global leverage: leverage of a successful Australian business model to international markets; leverage of global size to negotiate with suppliers from a position of strength; leverage of its professional knowledge to benchmark laboratories globally against its own centres of excellence; and leverage of its Australian developed proprietary technology across all geographic regions. Sonic Healthcare is now the third largest pathology diagnostics company in the world. post expansion into the USA in October 2005. CIR estimates future savings in global purchasing of reagents alone of up to $6m which at a PE of 18x is worth 36cps. Proprietary software has enhanced the ability to capture end-to-end connectivity and productivity gains. As doctors’ use of high speed broadband picks up manual data entry and handwritten ordering will disappear from the pathology & diagnostic imaging labs of the future. CIR estimates future savings of up to $10m pa in labour costs worth 60cps.

Sonic Healthcare Limited is listed on the Australian Stock Exchange (ASX) under stock code SHL. Barry S Patterson is the Chairman of Sonic Healthcare. You can view their investor website hereSHL. SHL was listed on the ASX on 9 August, 1971. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. Check your charts and good luck with your share trading!