Pro Medicus Limited (ASX: PME) shares have gone gangbusters over the past 5 years as the market wakes up to its growth story that straddles the lucrative healthcare and software sectors.
The stock joined the S&P/ASX 2oo (ASX: XJO) index of leading companies on June 24 2019 in a move that saw it receive more buying support from index-tracking funds and institutional investors.
The index inclusion also brought more professional research analyst coverage, with Goldman Sachs releasing an updated research note on November 24, 2o19.
Goldman's has actually reduced its earnings per share forecasts by around 10% on average through fiscal 2020 to 2022 and consequently lowered its 12-month share price target by a $1 to $26.50.
The analysts are forecasting Pro Medicus to earn 23 cents per share in fiscal 2020 to place the stock at $26.49 per share on 115x estimated forward earnings. The earnings multiple reduces to 85x for fiscal 2021 based on estimates for 31 cents in earnings per share.
Pro Medicus is widely regarded as a 'high-quality' business, but it's not going to smoke out the value investors on these kinds of frothy multiples.
Elsewhere, Goldman's has a 'sell' rating on Ramsay Health Care Ltd (ASX: RHC) and Fisher & Paykel Healthcare (ASX: FPH).
