The Ansell Limited (ASX: ANN) share price has received a series of big broker share price updates following its trading update. Ansell has been a standout performer among ASX200 healthcare shares given its market leading position within the personal protective equipment sector.
Ansell’s trading update
Ansell provided a trading update ahead of its 2020 AGM that should take place this week. The update upgraded its guidance for FY21, with the company experiencing continued strength in its business despite the continued uncertainties arising from COVID-19.
The update highlighted better than anticipated production volumes and sales across all five of its strategic business units, supplier cost increases being successfully managed, capex investments including capacity increases progressing to plan and more favourable exchange rates. Based on these developments, the company is now expecting organic growth to be in double digits and earnings per share (EPS) to be in the range of 135 to 145 cents (up from previous guidance of 126 to 138 cents).
From an earlier capital markets presentation on 15 October, Ansell highlighted that global demand for exam and single use products had tripled. This was driven by healthcare, frontline workers and new hygiene protocols in other industries. It cited an estimated 370 billion gloves were currently produced annually, However, an estimated 585 billion gloves were needed, resulting in capacity increases taking place.
Big broker upgrades
Ansell was previously an underperforming ASX200 healthcare share that delivered minimal shareholder return throughout 2015 to 2020. COVID-19 has been a huge turning point for the business’ growth trajectory.
Ansell has since received a series of broker upgrades as of Monday.
Citi retained its buy rating and a price target of $41.00. It was pleased with the better guidance on earnings and that company costs are under control.
Credit Suisse raised its Ansell share price target from $43.00 to $45.00 and retains an outperform rating. It reacted positively to the FY21 upgrade, and upgrades expected earnings by 7% for FY21.
Morgan Stanley retained an overweight rating and price target of $43.50. It notes solid progress on Ansell’s costs despite increasing manufacturing capacity.
Finally, UBS raised its Ansell share price target from $39.00 to $41.75 and retains a neutral rating. It was pleased with the company’s increased operational efficiencies, organic growth and growth potential. However, it is cautious at its current valuation.
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Returns as of 6th October 2020
More reading
- 6 major events for ASX shares this week
- Here’s why the Ansell (ASX:ANN) share price hit a record high today
Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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