if we take witts earnings calcs and say assume a $11m AUD NPAT - then the stock is trading on 11.6x PE at 77c per share.
As i mentioned, the sector average is 18.41 and the pharma darling, srx, trades at approx 40 x.
So if the market is willing to accept ACRs revenue streams will remain reasonably solid at current levels and currency ratios - its probably fair to assume PE will lift toward about 14-15x. ie the long run average price for a solid but not high growth industrial.
That would suggest a stock price around 97c. So you are looking at 25% uplift plus any dividends.
Of course it may take the market a little while to get there given disappointment to this stage and fda investigation.
But on the other hand, there is potential that the fda case might increase ACR product market share - in which case ACR will go back to being seen as a growth stock and pe multiple would go higher - esp given milestone payment potential.
I would also expect the rerating to happen sooner than normal too because of the fast rise in most healthcare stock p/es.
When new health cos are being floated at 16-17x pe then existing stocks with proven income streams should be able to at least match them.
Doesnt diminish the risks you mentioned earlier. But i agree with witt this stock appears currently well risk weighted for an investment based on what I'm currently aware of.
ACR Price at posting:
78.0¢ Sentiment: Buy Disclosure: Held
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