Morningstar | An Appreciation of Fisher & Paykel’s Defensiveness Increases our FVE to NZD 16.40
Fisher & Paykel enjoys a long growth trajectory as both the hospital and homecare markets for respiratory devices are growing strongly. Application of their high flow nasal therapy is the main driver of growth and is gaining clinical traction in the hospital market where Fisher & Paykel have an established stronghold. The market for this and other new applications has grown at a five-year CAGR of 24.2% and we forecast a forward growth rate of 20%. The use of Fisher & Paykel product in producing clinical evidence and leadership in nasal high flow therapy lead us to consider the market position as entrenched in the medium term.Although most of the margin expansion targeted by management has played out, with operating margin just 0.5% below the targeted 30%, the company has set out a revenue growth aspiration of 12% per year which our five-year forecast of 9.5% falls short of.Fisher & Paykel Healthcare, together with its subsidiaries, is a designer, manufacturer and marketer of medical device products and systems for use in respiratory care, acute care and the treatment of obstructive sleep apnea (OSA). Co.'s respiratory and acute care products include heated humidifier and respiratory products that are used in the treatment of a variety of medical conditions which interfere with normal respiration. Co.'s OSA products include the continuous positive airway pressure (CPAP) therapy devices, which is used in the treatment of OSA. CPAP is delivered through a mask attached to a flow generator device which generates airflow and enough pressure to keep the airway open.
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