F and P Healthcare wins back favour as share price nears 7 year high

Mark Lister head of private wealth research at Craigs Investment Partners (TVNZ)
Fisher & Paykel Healthcare 12-month price history (NZX.com)

Shares in Fisher & Paykel Healthcare [NZX: FPH] are near a seven-year high as the maker of breathing masks and respirators continued an 18-month trend of "winning back favour" with investors, according to an analyst

The stock rose 3 percent to $4.09 today, and has steadily climbed 77 percent over the last two years, as it recovered from loss of market share, and a "stubbornly high" New Zealand dollar, Mark Lister head of private wealth research at Craigs Investment Partners told BusinessDesk. Because the Auckland based company exports most of its respiratory products, it is exposed to fluctuations in the currency.

The kiwi has "been high for three years now. It's sort of plateaued, it hasn't gone down, but it hasn't gone up either," Lister said. "If the kiwi dollar fell tomorrow Fisher & Paykel would go up," but investors were increasingly more focused on "what's going on in their offshore market."

The stock is rated an average 'hold' based on a consensus of seven analysts compiled by Reuters, though there's a divided view with four 'buy' ratings, two 'hold' and one 'strong sell'. The analysts' median target price is $4.10.

In November, F&P Healthcare said it expects annual profit of between $90 million and $95 million, though trimmed its predictions for operating revenue to a range of $610 million to $625 million from between $625 million and $645 million on a slightly stronger currency than anticipated.

Craigs' Lister said the company has mitigated the impact of the strong currency "by getting the right product cycle, getting the right products into the right markets at the right time."

This turnaround in their business has caused "investors to change their tune", especially as the market grew more comfortable with a high kiwi, Lister said.

"F&P is still growing in those offshore markets, even though there is a high dollar, they're still seeing growth, so they're able to weather the storm," he said.


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