On Thursday, Goldman Sachs (NYSE:GS) began coverage on Fisher & Paykel Healthcare (FPH:AU) (OTC: FSPKF), issuing a Buy rating and setting a price target of NZD42.70. The firm's positive stance on the healthcare company is driven by several key factors that are expected to contribute to the company's financial performance.
The analysts at Goldman Sachs predict a significant acceleration in revenue growth for Fisher & Paykel's hospital segment, foreseeing a compound annual growth rate (CAGR) of +15.1% from FY24 to FY30E. This growth is attributed to an expansion in the company's Total (EPA:TTEF) Addressable Market (TAM), which is anticipated to enhance the segment's earnings.
The optimism surrounding Fisher & Paykel also stems from its favorable position in the product cycle. The company is slated to introduce several new products between calendar years 2022 and 2024. These launches are expected to not only boost the company's Gross Margin (GM%) but also provide a buffer against potential adverse effects from changes in U.S. healthcare policy.
Additionally, Goldman Sachs highlights the potential for Fisher & Paykel in the Nasal High Flow Therapy (NHFT) home segment. The analysts note that certain regions have begun to offer reimbursements for these therapies, which could open up new opportunities for the company's growth in this area.
The initiation of coverage by Goldman Sachs reflects their confidence in Fisher & Paykel Healthcare's market strategy and product pipeline, as well as the company's ability to capitalize on emerging opportunities in the healthcare market. The NZD42.70 price target suggests a positive outlook for the stock's future performance.
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