Want to see AU:SHL full AI Analyst Report?
Top Page
Sonic Healthcare Limited
(Sydney:SHL)
Select Model
Select Model
Rating:63Neutral
Price Target:
AU$23.00
▲(12.52% Upside)
Action:Reiterated
Date:08/21/26
The score is primarily constrained by financial performance: margins and returns have fallen materially versus prior peak years, leverage is trending higher, and free cash flow conversion weakened. Valuation is a partial offset with a moderate P/E and ~5% dividend yield. Technical indicators are mixed with subdued momentum, while the earnings call was broadly positive on operations and guidance but balanced by multiple regulatory, FX, and market risks.
Positive Factors
Resilient revenue and advanced diagnostics growth
Recurring demand for pathology and imaging, supported by healthcare utilization and specialized testing, provides a durable growth base. Strong advanced diagnostics performance also indicates improving service mix and opportunities beyond routine testing.
Negative Factors
Structural margin compression and weaker returns
The sustained decline from prior profitability peaks suggests cost, reimbursement or business-mix pressure rather than a temporary fluctuation. Lower margins and a 7.3% return on equity reduce earnings resilience and limit operating leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Resilient revenue and advanced diagnostics growth
Recurring demand for pathology and imaging, supported by healthcare utilization and specialized testing, provides a durable growth base. Strong advanced diagnostics performance also indicates improving service mix and opportunities beyond routine testing.
Read all positive factors
Sonic Healthcare Limited (SHL) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$9.66B
Dividend Yield5.52%
Average Volume (3M)4.21M
Price to Earnings (P/E)15.9
Beta (1Y)0.77
Revenue Growth15.53%
EPS Growth15.11%
CountryAU
Employees45,000
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)1.23
Shares Outstanding494,237,950
10 Day Avg. Volume8,292,149
30 Day Avg. Volume4,206,653
Financial Highlights & Ratios
PEG Ratio1.13
Price to Book (P/B)1.23
Price to Sales (P/S)0.94
P/FCF Ratio13.27
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$22.27Price Target Upside8.95% Upside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)1.23
Revenue Forecast (FY)AU$11.09B
Sonic Healthcare Limited Business Overview & Revenue Model
Company Description
Sonic Healthcare Limited delivers medical diagnostic services to a diverse clientele, including medical professionals, hospitals, public health organizations, and individual patients. The company's services encompass a broad spectrum of laboratory...
How the Company Makes Money
Sonic Healthcare makes money by delivering diagnostic services and being paid for those services by a mix of government/public payors, private health insurers, hospitals, clinicians, and patients (depending on the country, setting, and service). I...
Sonic Healthcare Limited Earnings Call Summary
Earnings Call Date:Aug 19, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Feb 22, 2027
Earnings Call Sentiment Positive
The call conveyed a largely positive operational and financial picture: strong FY2026 headline results (13% revenue growth, 11% EBITDA growth, 17% NPAT growth), clear progress on acquisitions and synergy capture (notably LADR), solid organic and advanced diagnostics growth, and active capital management. Notable challenges were highlighted—regulatory fee cuts in Switzerland (~CHF 20m), integration and labor cost pressures in the U.K., legacy software impairments (AUD 83m), U.S. market headwinds and uncertainty over potential PAMA cuts, and elevated FY2026 capex and interest costs. Management has provided FY2027 guidance that factors in many of these headwinds and set out remediation initiatives (U.S. operating review, continued synergy capture, digital transformation). On balance, the positives (growth, acquisitions performing, synergy delivery, strong cash/capital actions) outweigh the identified headwinds, although risks remain in specific markets and from regulatory/FX exposures.Positive Updates
Strong FY2026 Financial Performance
Total revenue up 13% to AUD 10.867 billion; EBITDA up 11% to AUD 1.933 billion (AUD 1.916 billion constant currency); net profit after tax up 17% to AUD 621 million; EPS up 14% to AUD 1.26. FY2026 underlying results in line with guidance.
Negative Updates
Regulatory Fee Reductions in Switzerland
Regulatory changes effective 1 July 2026 expected to reduce FY2027 revenue by an estimated CHF 20 million (approximately 3% of Switzerland revenue). This is a direct top-line and margin headwind for FY2027.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong FY2026 Financial Performance
Total revenue up 13% to AUD 10.867 billion; EBITDA up 11% to AUD 1.933 billion (AUD 1.916 billion constant currency); net profit after tax up 17% to AUD 621 million; EPS up 14% to AUD 1.26. FY2026 underlying results in line with guidance.
Read all positive updates
Company Guidance
Sonic guided FY2027 constant‑currency underlying EBITDA of AUD 1.95–2.03 billion (excluding ~AUD 30 million of back‑office IT transformation costs), with depreciation expected at AUD 810–825 million, amortisation AUD 90–95 million, interest expense up ~6% versus FY2026 and an effective tax rate of ~27%; the guidance excludes potential PAMA fee cuts in the U.S., any property sale gains and assumes no further regulatory changes and current interest rates. Management expects the U.S. operating review to add ~AUD 25–30 million to FY2027 earnings, flagged a Switzerland regulatory revenue impact of CHF 20 million (≈3% of revenue) for FY2027, noted a potential FX EBITDA headwind of ~AUD 40–50 million at current spot rates, expects maintenance CapEx to remain around ~3% of revenue (FY2026 maintenance CapEx ~AUD 351 million) with total PP&E CapEx falling from FY2026’s AUD 631 million as major projects complete, and reiterated capital discipline with a debt cover ratio of 2.2, ~AUD 1.6 billion headroom (pre‑final dividend) and a medium‑term dividend payout target of 70–80% of net profit.Sonic Healthcare Limited Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
66
Positive
Cash Flow
57
Neutral
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 10.95B | 9.65B | 8.93B | 8.14B | 9.31B |
| Gross Profit | 3.03B | 3.19B | 2.33B | 6.87B | 3.41B |
| EBITDA | 1.96B | 1.24B | 1.66B | 1.72B | 2.83B |
| Net Income | 608.29M | 513.60M | 511.09M | 684.98M | 1.46B |
Balance Sheet | |||||
| Total Assets | 16.78B | 16.05B | 14.83B | 13.56B | 13.11B |
| Cash, Cash Equivalents and Short-Term Investments | 653.70M | 673.77M | 645.00M | 797.99M | 780.00M |
| Total Debt | 5.84B | 5.17B | 4.52B | 3.10B | 3.01B |
| Total Liabilities | 8.29B | 7.58B | 6.75B | 5.64B | 5.68B |
| Stockholders Equity | 8.34B | 8.32B | 7.92B | 7.74B | 7.27B |
Cash Flow | |||||
| Free Cash Flow | 774.71M | 960.55M | 492.01M | 974.02M | 1.85B |
| Operating Cash Flow | 1.41B | 1.30B | 1.07B | 1.47B | 2.23B |
| Investing Cash Flow | -896.99M | -577.62M | -1.81B | -580.04M | -989.18M |
| Financing Cash Flow | -511.96M | -735.93M | 592.41M | -911.51M | -1.35B |
Sonic Healthcare Limited Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | AU$9.66B | 15.89 | 7.20% | 5.52% | 15.53% | 15.11% | |
60 Neutral | AU$861.29M | 39.29 | 3.24% | 4.29% | 25.73% | 390.83% | |
57 Neutral | AU$330.41M | -0.80 | -114.08% | 35.60% | 2.16% | 21.04% | |
54 Neutral | AU$512.93M | 22.25 | 15.80% | 4.69% | -0.90% | -25.09% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
47 Neutral | AU$19.76M | -1.41 | -35.10% | ― | -9.10% | 31.75% | |
43 Neutral | AU$25.44M | -3.43 | -881.94% | ― | 743.51% | -1.52% |
* Healthcare Sector Average
AU:SHL
Sonic Healthcare Limited
19.57
-2.23
-10.23%
AU:HLS
Healius Limited
0.46
-0.36
-44.24%
AU:BDX
BCAL Diagnostics Limited
0.07
<0.01
11.67%
AU:GSS
Genetic Signatures Ltd.
0.08
-0.19
-70.00%
AU:IDX
Integral Diagnostics Ltd.
2.33
-0.47
-16.67%
AU:ACL
Australian Clinical Labs Ltd
2.77
0.28
11.29%
Sonic Healthcare Limited Corporate Events
Sonic Healthcare to Present Full‑Year 2026 Financial and Operational Results
Aug 20, 2026
Sonic Healthcare has scheduled a presentation of its financial and operational results for the year ended 30 June 2026, to be hosted today at 10:00 a.m. AEST by Chief Executive Officer Dr Jim Newcombe and Chief Financial Officer Chris Wilks. The a...
Sonic Healthcare posts strong FY2026 results as advanced diagnostics and synergies drive growth
Aug 20, 2026
Sonic Healthcare reported a strong FY2026 performance, with revenue up 13% to A$10.87 billion and underlying EBITDA rising 11% to A$1.93 billion, supported by 5% organic growth and operating leverage. Underlying net profit climbed 17% to A$621 mil...
Sonic Healthcare Announces AUD 0.63 Interim Dividend
Aug 20, 2026
Sonic Healthcare Limited has declared an interim dividend of AUD 0.63 per ordinary fully paid share for the six‑month period ended 30 June 2026. The distribution timetable sets an ex‑dividend date of 2 September, a record date of 3 Sep...
Sonic Healthcare Files 2026 Preliminary Final Report with ASX
Aug 20, 2026
Sonic Healthcare Limited has lodged its preliminary final report for the year ended 30 June 2026 with the Australian Securities Exchange, in line with ASX Listing Rule 4.3A. The Appendix 4E filing, authorised by the company’s board, provides...
Sonic Healthcare to Release 13.8 Million Escrowed Shares Tied to LADR Acquisition
Jun 17, 2026
Sonic Healthcare will release 13,833,980 ordinary fully paid shares from voluntary escrow after market close on 1 July 2026. These shares were originally issued as part of the consideration for Sonic’s acquisition of German laboratory group ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.