Forsyth Barr analysts have upgraded their rating of Fisher & Paykel Healthcare to neutral following recent share-price weakness.
They said the weakening NZD/USD and Fisher & Paykel's defensive qualities in an uncertain market is the reason for the rating lift.
"In the absence of material earnings downgrades, we struggle to see catalysts to drive the share price materially lower."
Forsyth Barr analysts Matt Montgomerie and Benjamin Crozier said Fisher & Paykel's earnings multiple had puzzled them for some time, but with the market pricing long-term revenue growth of 9% and Ebit (earnings before interest and taxes) margins of 28%, they forecast strong near-term earnings growth.
They said they came away with three takeaways from Fisher & Paykel's recent investor day: the long-term growth runway remains strong, and Fisher & Paykel continues to be well positioned, the gross margin recovery back to the company's 65% target will take time, and covid-19 is no silver bullet.
Fisher & Paykel Healthcare shares were down 2.60% at $21.340 on Wednesday but trending up 12.19% over the past 12 months.
