As management at Nanosonics had provided a trading update in late-January there were few surprises for Morgans in 1H results. In line with that update revenue fell by -2%, while earnings (EBIT) of $3m were also in line with the broker's forecast.

While budgetary strains at hospitals are unlikely to subside for at least another half, the analysts note the company can massage costs to soften the delayed capital sales impact to profitability.

Management guided to revenue growth from the 1H of 6-15%, implying to the broker a FY24 sales range of between $164-$171m.

Morgans sees no necessity to buy shares in Nanosonics at this time, based on 1H results and management commentary, but retains an Add rating, noting long-term value potential for patient shareholders. The target falls to $3.50 from $3.88.

Sector: Health Care Equipment & Services.

Target price is $3.50.Current Price is $3.13. Difference: $0.37 - (brackets indicate current price is over target). If NAN meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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