Pro Medicus shares rally as analysts hike target prices
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The news: Pro Medicus shares rallied on the ASX after Bell Potter upgraded its rating on the medical imagery company and a slew of analysts hoisted their target prices on the stock.
The numbers: Pro Medicus shares were up 2.4% to $285.69 at 1:40pm AEDT. They closed 3.2% lower on Thursday after the company's first-half result fell short of market estimates.
Analysts made the following changes to Pro Medicus:
- Bell Potter upgraded from 'hold' to 'buy' and raised its target price from $260 to $330;
- Morgans kept its 'hold' rating and raised its target price from $225 to $250;
- Citi kept its 'sell' rating and raised its target price from $150 to $165;
- Macquarie kept its 'neutral' rating and raised its target price from $180.50 to $258.50; and
- Morningstar increased its fair value estimates by 4% to $48.
The context: Bell Potter analyst John Hester said Pro Medicus' full-stack solution "continues to wipe the floor with competitors". He pointed to the company's 10 contract announcements in the last 12 months, including two new academic medical centre clients, as highlights from the period.
Morningstar analyst Shane Ponraj said he is "more optimistic" on Pro Medicus with "significant new contracted revenue about to come online".
However, he said, the company's shares are "materially overvalued" with "a lot of good news baked in".
The sources: Bell Potter research, Morgans research, Citi research, Macquarie research, Morningstar research
