Analysts Are Updating Their Sonic Healthcare Limited (ASX:SHL) Estimates After Its Half-Year Results

Last week, you might have seen that Sonic Healthcare Limited (ASX:SHL) released its half-yearly result to the market. The early response was not positive, with shares down 2.7% to AU$28.05 in the past week. It was a credible result overall, with revenues of AU$4.7b and statutory earnings per share of AU$0.49 both in line with analyst estimates, showing that Sonic Healthcare is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Sonic Healthcare

Following the latest results, Sonic Healthcare's twelve analysts are now forecasting revenues of AU$9.68b in 2025. This would be a credible 3.7% improvement in revenue compared to the last 12 months. Before this earnings report, the analysts had been forecasting revenues of AU$9.65b and earnings per share (EPS) of AU$1.10 in 2025. Overall, while the analysts have reconfirmed their revenue estimates, the consensus now no longer provides an EPS estimate. This implies that the market believes revenue is more important after these latest results.

There's been no real change to the consensus price target of AU$30.04, with Sonic Healthcare seemingly executing in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Sonic Healthcare at AU$33.00 per share, while the most bearish prices it at AU$26.10. This is a very narrow spread of estimates, implying either that Sonic Healthcare is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Sonic Healthcare's rate of growth is expected to accelerate meaningfully, with the forecast 7.6% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Sonic Healthcare is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their revenue estimates for next year, suggesting that the business is performing in line with expectations. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at AU$30.04, with the latest estimates not enough to have an impact on their price targets.

We have estimates for Sonic Healthcare from its twelve analysts out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Sonic Healthcare , and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.