This morning Australian Clinical Labs (ACL) released positive news upgrading its Revenue and Net Profit After Tax (NPAT). The company now expects
- Total revenue of between $497.3M to $517.2M
- NPAT of between $116.3M and $128.0M
The upgrade, as expected, is because of continued strong demand for COVID-19 testing, particularly in VIC and NSW, as well as a sustained resilient performance of the non-COVID-19 business.
You can read the complete statement from the company.
As you would expect, the market has reacted positively to this news, and the share price is now trading at an all-time high.
Pro Forma dividend assumes a 60% target payout ratio in the company’s prospectus. Based on an NPAT at the lower end of the range, the FY22 Dividend could come out at $0.35. Based on the initial purchase price for the HC portfolio, this would represent a 7.95% yield, not considering the potential benefit of franking credits.
The high dividend yield on offer will attract investors to the company and should drive the share price higher.
All the news is positive so we will make the following changes to the profit target and stop-loss
Trade Action
Current position long 2,000 shares purchased at $4.40
Stop loss: On full position, 2,000 shares stop loss is increased to $4.25
Profit Target: We are putting a profit target for half the position at $5.95 and $6.75 for the second half of the position.