Fisher n Paykel Healthcare

The steep decline in Fisher & Paykel Healthcare’s (FPH) share price has seen equity analysts Morningstar upgrade their recommendation to BUY, with an intrinsic valuation of NZ$3.30. Morningstar expects that FPH’s “outlook for the year ending 31 March 2012 is better than the previous year from a constant currency perspective”. It expects that Obstructive Sleep Apnea should show 15% growth due to the introduction of masks and accessories during the year while Respiratory Humidification growth is expected to be between 10-15%, underpinned by consumables.

Morningstar also expects that FPH’s “Dividend Reinvestment Plan program will result in share dilution, and consequently earnings per share growth will lag behind net profit growth.”

Dan Stratful broker at Investment Research Group (IRG) says that FPH has provided guidance to the market that reported profit is expected be between NZ$62 million to NZ$76 million based on a NZD/USD exchange rate of between US70c to US80c. "However with the kiwi trading well into the 80’s and expected to stay there it looks like full year net profit will come in at the lower end of that range". “FPH is a quality New Zealand company that is experiencing high growth when measured in constant currency. But a high kiwi dollar means that its reported results are lagging its constant currency results.”

A recent report also suggests that FPH’s selloff is due to competitor ResMed stealing market share off FPH in some of its overseas markets.

Contact IRG on 0800 437 8489

Dan Stratful

Authorised Financial Adviser (AFA)

dan.stratful@irg.co.nz

**A disclosure statement is available, on request and free of charge by calling 0800 437 8489.

Broker recommendations are sourced from Morningstar equity analysts.

Disclaimer

In accordance with the Financial Advisers Act 2008 (“the Act”) Sharechat is “Class Advice” and any advice or recommendations contained on this webpage is not “Personalised Advice” as defined by the Act. This means Sharechat does not take into account an investor’s particular financial position, financial needs, financial goals or risk profile. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.