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On Wednesday, Fisher & Paykel Healthcare Corporation Limited (FPH:NZ) (OTC: FSPKF) received an upgrade in stock rating from Hold to Buy by Jefferies, with the price target also being increased to NZD40.90 from the previous NZD39.40. The upgrade comes after the company demonstrated strong financial performance, with revenue growth reported at 16% compared to the prior corresponding period (pcp).
Vanessa Thomson, an analyst at Jefferies, praised Fisher & Paykel Healthcare for its consistent delivery of results through a combination of product innovation, the promotion of clinical change, and continuous operational improvement. The company’s new application consumables saw an impressive 20% growth on pcp, while its OSA masks achieved a 14% increase on pcp.
The financial results also showed a significant expansion in the company’s gross margin, which widened by 181 basis points (129bp in constant currency). The company maintains an impressive gross margin of 60.68% and has achieved revenue growth of 11.57% over the last twelve months. Thomson highlighted these financial metrics as a testament to the company’s strong market position and its ability to leverage operational efficiencies.
The improvement in gross margin and the company’s leading share in the market were among the key factors influencing the decision to upgrade the stock rating. Jefferies sees Fisher & Paykel Healthcare as being well-positioned in regards to tariffs, which contributed to the positive outlook and the raised price target.
Investors are now watching Fisher & Paykel Healthcare as the company continues to make gains through its influence on clinical practice and its potential for further operating leverage, as noted by Jefferies’ analysis. The new price target of NZD40.90 reflects the firm’s confidence in the ongoing success of Fisher & Paykel Healthcare’s business strategy.
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