Jefferies cuts Fisher & Paykel stock rating to Hold, PT steady

Jefferies downgraded Fisher & Paykel Healthcare (FPH:NZ) to Hold from Buy, maintaining its NZD39.40 price target ahead of the company's full-year 2025 earnings report on May 28. The downgrade reflects concerns about the impact of tariffs on gross margins, changes in clinical practices, hospital utilization rates, and operational gains. While the price target remains unchanged, the firm signals limited near-term upside potential for the stock.

Analysis

Jefferies has downgraded Fisher & Paykel Healthcare Corporation Limited (FPH:NZ) to Hold from a previous Buy rating, while maintaining its price target at NZD39.40. This rating change occurs ahead of the company's full-year 2025 earnings report, scheduled for release on May 28. The downgrade reflects Jefferies' cautious stance due to several factors that could influence Fisher & Paykel's performance, specifically the potential impact of tariffs on gross margin trajectory, shifts in clinical practices, hospital utilisation rates, and the achievement of operational gains. The unchanged price target, despite the downgrade, suggests that Jefferies, while seeing limited immediate upside potential for the stock, does not anticipate a significant decline in its market value. The upcoming financial results will be crucial for investors to gauge how these identified variables have affected the company's financial health and market standing.

Key Decisions for Investors

• Investors should closely monitor Fisher & Paykel Healthcare's full-year 2025 earnings report on May 28 for insights into the impact of tariffs on gross margins and updates on hospital utilisation rates.
• Given the Hold rating and maintained price target, current shareholders might consider maintaining their positions while awaiting further catalysts, whereas potential investors may exercise caution given the signaled limited near-term upside.
• Pay particular attention to management's commentary during the earnings release regarding strategies to address tariff impacts and adapt to changes in clinical practices, as these are key concerns underpinning Jefferies' revised outlook.