Analysts at Liberum reiterated their ‘buy’ recommendation and 190.0p target price on shares of SourceBio International, telling clients that there was room for the company to beat its estimates for 2022 following the appearance of Omicron.
PCR testing was now at its second-highest level since the pandemic began and the government had reintroduced Day 2 PCR testing for travellers returning to the UK, they pointed out.
There were also discussions to reintroduce mandatory Day 8 PCR testing for travellers.
All were positives for the provider of laboratory services.
Furthermore, it base business was trading at pre-pandemic levels, the analysts said.
All told, that left the company “well-positioned” to execute against their estimates for the 2021 financial year of £86.5m in sales and earnings before interest, taxes, depreciation and amortisation of £21.0m and to “potentially outperform in 2022.”
“We have left estimates unchanged at this stage whilst the outlook for PCR testing volumes remains uncertain. We await an update in guidance from management in early 2022. Nevertheless, we believe there is upside potential to forecasts. We reiterate BUY and target price of 190p.
“[…] The 2022 testing outlook remains uncertain but if the demand for private PCR testing remains high and international travel continues, then Source is well-positioned to benefit and outperform on expectations.”
