Citi upgrades healthcare trio ResMed, Cochlear and Integral Diagnostics to 'buy'
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The news: Shares in health groups Cochlear and Integral Diagnostics rallied after Citi upgraded its ratings on both stocks to 'buy'. Citi also upgraded fellow healthcare stock ResMed, which saw its shares fall.
The numbers: Cochlear shares were up 2.9% to $270.96 at 2:30pm AEDT. Citi increased its target price on the hearing implant maker from $290 to $300.
Integral Diagnostics shares were up 3.3% to $2.22 as Citi kept the medical imaging group's target price at $2.70.
However, ResMed shares were down 3.6% to $35.58, even as Citi upgraded the respiratory health company from 'neutral' to 'buy' and lifted its target price from $41 to $44.
The context: Citi said its upgrades on both Cochlear and Integral Diagnostics were driven by double-digit selloffs in the companies following softer-than-expected first-half results. Cochlear shares fell 14% on the day of its result, while Integral Diagnostics shares slumped 25% over two sessions.
Meanwhile, Citi upgraded ResMed due to its "reasonable valuation", strong earnings-per-share growth, strong free cash flow generation and the prospect of no debt by the end of the current financial year.
The source: Citi research
