Global markets added to gains overnight as US market notched fresh record highs, as data pointed to a resilient US domestic economy.
Stock in Focus: Fisher & Paykel Healthcare (FPH:NZX / FPH:ASX)
Fisher & Paykel Healthcare shares held on to their recent gains yesterday as it released first half earnings and profit guidance which was unchanged from October.
FPH said first-half earnings were up 24% to 121.2 million, and operating revenue was $570.9 million, 12% above the first half last year.
In terms of the outlook for the remainder of the 2020 financial year, it looks solid and likely conservative. FPH anticipate consistent underlying trends in the Hospital product group, and Homecare revenue for the 2020 financial year similar to the previous financial year, in constant currency terms. FPH expect "At current exchange rates we continue to expect full year operating revenue for the 2020 financial year to be approximately $1.19 billion and net profit after tax to be in the range of approximately $255 to $265 million".
We remain positive on the medium term outlook for FPH as a solid defensive healthcare holding, although new investors may want to be selective on their entry point as FPH shares look fairly valued at the current juncture.
We currently have a BUY rating on FPH.
Members should look out for a full update on FPH to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian market continued to rally (ASX 200 index +0.82%) and Australian shares closed at a record high on Wednesday as confidence that an interim trade deal between the US and China was imminent lifted investor confidence. In stock news, Collins Foods' underlying half-year profit has risen 9% to $23.9 million, boosted by a 4.9% rise in same-store sales at its KFC Australia franchises.
Shares in Telstra jumped as it reaffirmed its underlying earnings guidance of between $7.4 and $7.9 billion. Despite flagging that restructuring costs would be about $300 million higher than expected, it said operating expenses would be lower and that its broader cost-reduction program was on track.
The New Zealand market added to gains yesterday (NZX 50 index +0.69%) with Ryman leading the market higher, while Metlifecare gave back some of its recent rally. Outside the benchmark index, Cavalier Corporation fell after the company provided first-half guidance at its annual meeting. The wool producer said first-half revenue for 2020 is expected to be between $61-64 million, from $70 million in the first half of this year, while operating earnings are expected to be in the range of $1.2-$1.9 million from $4.6 million. Turners Automotive Group rose after the car auction house said group revenue was up by 1% to $171 million and underlying net profit before tax had risen by 11% to $14.8 million.
3 Things Markets Will be Watching this Week
- Trade deal prospects between the US & China remain at the forefront of investor attention.
- RBA governor Philip Lowe makes a speech on Tuesday.
- The RBNZ releases its financial stability report on Wednesday.
Have a Great Day,