HEALIUS LIMITED ((HLS)) Upgrade to Outperform from Neutral by Credit Suisse.
Healius will sell its 69 medical centres, 13 Health & Co practices and 62 dental clinics for $500m. Proceeds of $470m are expected on completion. The sale to BGH Capital requires approval from the Foreign Investment Review Board and should be completed this year.
Meanwhile, trading conditions have improved in recent weeks with pathology revenue close to prior year levels and radiology revenue down in just single digits. Credit Suisse raises FY20 earnings estimates by 20% and FY21 by 14%, expecting a stronger recovery from the pandemic.
Rating is upgraded to Outperform from Neutral, as the broker assesses the stock is trading in line with the multiple paid for medical centres, which is the least attractive and lowest-return business unit.
Target is raised to $3.25 from $2.47.
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HLS Price at posting:
$3.04 Sentiment: Buy Disclosure: Held
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