Bell Potter has been busy running the rule over the Grattan Institute report this month relating to the pharmacy industry.

The broker notes that if the changes suggested were put in place there could be significant implications for Chemist Warehouse owner Sigma Healthcare Ltd (ASX: SIG).

What is in the report?

Bell Potter highlights that the Future Pharmacy report shines light on the inefficiencies of the funding and other arrangements for Community Pharmacy (CP) in Australia. 

It notes that if “either side of politics to embrace the deregulation measures as recommended, earnings patterns for SIG and many of the pharmacies whose earnings are preserved by this pharmacy gerrymander would change forever.”

Commenting on the report, Bell Potter said:

The Grattan report identifies numerous inefficiencies within Australia’s system for CP including pharmacy remuneration and the opacity of data supporting the current structure, however, maximum venom is reserved for the pharmacy ownership laws and location rules. 

The rules are no longer fit for purpose and now act as a handbrake to further competition while preserving the earnings stream of incumbents. The rules also prevent the participation of supermarkets in CP for reasons that are less clear with each passing year.

Thankfully for Sigma Healthcare and its shares is that Bell Potter believes any potential changes to regulations would still be a long way off. It adds:

Whether the Grattan report influences change remains to be seen, however, CP is probably a long way down the Federal Government’s priority list for reform. Additionally, reform in this section of the market is unlikely to generate momentum on polling day, particularly if the Guild and AMA oppose changes as history suggests is likely. For these reasons, the regulatory environment supporting Community Pharmacy and the likes of Sigma Healthcare are unlikely to change.

Should you buy Sigma Healthcare shares?

According to the release, Bell Potter has retained its hold rating and $3.00 price target on the company’s shares. This is just a touch above its current share price of $2.93.

Commenting on its hold rating, the broker said:

Regulatory upheaval in CP is unlikely, nevertheless, investment metrics for SIG are not sufficiently attractive to warrant a Buy rating, particularly with a single payer (the Federal Government) representing a disproportionate level of group revenue. 

The Government’s propensity to alter funding arrangements on short notice with little industry consultation should elevate the risk rating on SIG. We maintain our Hold rating and PT $3.00.

The post Chemist Warehouse: Are Sigma Healthcare shares a buy, hold, or sell? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) endured a bumpy and ultimately negative start to the week’s trading this Monday. After remaining in positive territory for most of today’s session, investors ended up getting cold feet right before the closing bell. After that collapse in confidence, the ASX 200 ended up finishing down 0/061%, leaving the index at 8,791.3 points.

This rather indecisive session for the Australian markets came after an even nastier end to the American trading week on Friday night (our time).

The Dow Jones Industrial Average Index (DJX: .DJI) had another tough session, dropping 0.77%

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) fared even worse, falling a horrid 1.4%.

But let’s get back to this week and our local markets now and take a closer look at what was happening amongst the different ASX sectors today.

Winners and losers

Tech shares were the sector that was singled out for punishment this Monday. The S&P/ASX 200 Information Technology Index (ASX: XIJ) was slammed, tumbling 1.54%.

Utilities stocks fared better, but the S&P/ASX 200 Utilities Index (ASX: XUJ) still tanked by 0.63%.

Healthcare shares were in a similar boat. The S&P/ASX 200 Healthcare Index (ASX: XHJ) saw its value dive 0.49% today.

Mining stocks weren’t popular either, evident by the S&P/ASX 200 Materials Index (ASX: XMJ)’s 0.34% dip.

Gold stocks were also no safe haven. The All Ordinaries Gold Index (ASX: XGD) ended up sinking 0.23%.

Real estate investment trusts (REITs) followed right behind gold, with the S&P/ASX 200 A-REIT Index (ASX: XPJ) dipping 0.17%.

Our last losers this Monday were financial stocks. The S&P/ASX 200 Financials Index (ASX: XFJ) slipped 0.07% by the closing bell.

Let’s turn to the winning sectors now. Leading the charge were energy stocks, illustrated by the S&P/ASX 200 Energy Index (ASX: XEJ)’s 1.8% surge.

Consumer staples stocks also ran hot. The S&P/ASX 200 Consumer Staples Index (ASX: XSJ) roared 0.43% higher this session.

Communications shares saw high demand too, with the S&P/ASX 200 Communication Services Index (ASX: XTJ) lifting 0.39%.

Industrial stocks came next. The S&P/ASX 200 Industrials Index (ASX: XNJ) advanced 0.16% today.

Finally, consumer discretionary shares got themselves over the line, as you can see by the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ)’s 0.11% bump.

Top 10 ASX 200 shares countdown

Today’s winner was healthcare share 4DMedical Ltd (ASX: 4DX). 4DMedical shares soared 7.19% higher this session to close at $3.43 each. This may have been a reaction to last week’s announcement.

Here’s the rest of today’s best: 

ASX-listed company	Share price	Price change
4DMedical Ltd (ASX: 4DX)	$3.43	7.19%
Deep Yellow Ltd (ASX: DYL)	$1.31	6.10%
Yancoal Australia Ltd (ASX: YAL)	$5.68	5.97%
South32 Ltd (ASX: S32)	$4.08	4.62%
Pantoro Gold Ltd (ASX: PNR)	$2.00	4.18%
Graincorp Ltd (ASX: GNC)	$5.23	4.18%
Viva Energy Group Ltd (ASX: VEA)	$2.43	3.85%
AMP Ltd (ASX: AMP)	$2.09	3.47%
New Hope Corporation Ltd (ASX: NHC)	$5.38	2.87%
Whitehaven Coal Ltd (ASX: WHC)	$7.63	2.69%

Our top 10 shares countdown is a recurring end-of-day summary that shows which companies made big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Westpac Banking Corp (ASX: WBC) shares have pulled back from their recent highs, which may tempt investors who missed the earlier run.

The fully franked dividend also remains appealing.

But has the lower share price created one of the best buying opportunities on the ASX this week?

A fair price rather than a bargain

Westpac shares are trading around $36.66.

According to consensus estimates, this puts the shares on a price-to-earnings ratio of around 17.2 times FY26 earnings and 17.1 times FY27 earnings.

Those multiples are far from outrageous, particularly for a major bank with a large customer base and a strong capital position.

The forecast dividend adds more weight to the investment case.

Consensus estimates are for dividends per share of $1.54 in FY26 and $1.55 in FY27, giving Westpac forward dividend yields of approximately 4.2% in both years. Those dividends are expected to be fully franked, which could improve the after-tax income for eligible investors.

I can understand why that combination would attract income-focused shareholders.

Westpac is making progress

I think the investment case has improved under CEO Anthony Miller.

Westpac has been growing across mortgages, business lending, and deposits, while also trying to reduce unnecessary complexity across the company. Its first-half result showed continued lending momentum, lower costs compared with the previous half, and a capital position comfortably above management’s target.

I also like the opportunity in business banking. Relationships with business customers can extend across lending, deposits, payments, equipment finance, working capital, and transaction services. That can make them deeper than a standard home loan relationship and provide several ways for Westpac to earn revenue.

The UNITE technology program could also leave Westpac with a simpler and more efficient bank. Bringing systems and processes together should eventually improve the customer experience and reduce duplication, although a transformation of this size will require careful execution.

Why I am staying selective

The biggest issue for me is the limited earnings growth currently expected.

Consensus estimates suggest EPS will rise only slightly between FY26 and FY27. At around 17 times forecast earnings, I do not think investors are being offered enough of a discount to compensate for that modest outlook.

Banking also remains intensely competitive. Westpac must fight for mortgages and deposits while investing heavily in technology, meeting regulatory requirements, and preparing for credit losses if economic conditions weaken.

Foolish takeaway

Westpac is heading in a better direction, and the recent share price weakness has improved the entry point.

Existing shareholders have good reasons to remain patient while collecting a fully franked dividend. Income investors may also find the forecast yield attractive enough to begin a measured position.

Even so, I would not call Westpac shares a top buy this week. The valuation looks fair rather than cheap, while forecast earnings growth remains subdued.

For me, Westpac is a hold at current prices and a potential buy after a further pullback.

The post Are Westpac shares a top buy this week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.