Primary Health Care drops on UBS note

Stock

Primary Health Care (PRY) $3.50 as at 14/06/2018

Event

A change of analyst at UBS has caused a significant fall in Primary Health Care’s stock this morning, with the new lead having a materially different view from the old, dropping the rating to a sell, and the target 12.5% to $3.50. UBS noted that the stock was trading on PE of ~20x earnings, now lower after today’s move, with little growth trajectory and risk to profits – bulk billing changes, Fair Work Commission review into wages among other risks. The stock has dropped 9% today and is now trading around the revised target price.

Primary Health Care (PRY) Chart

Primary Health Care PRY chart

Market Matters Take/Outlook

We like PRY, although today’s move may lead to a breakdown technically. We flagged PRY as a potential takeover target back in May and today’s weakness could entice China’s Jhango Group into making a move.