Company Reports

Fisher & Paykel Healthcare reported fiscal 2026 net profit after tax of NZD 469 million, up 24% on last year. Management guidance is fiscal 2027 revenue of NZD 2.45 billion-NZD 2.57 billion and NPAT of NZD 500 million-NZD 550 million.

Fisher & Paykel Healthcare is well positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow therapy in the hospital division is a priority, followed by targeting treatment of COPD in the homecare segment, and longer-term surgical technologies. What management terms “new applications” consist of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes, leading to a shorter length of hospital stay and lower overall treatment cost.

Fisher & Paykel lifted its fiscal 2026 revenue and NPAT guidance by roughly 4% and 6%, respectively, due to a stronger New Zealand dollar. The year ending March 31 is tracking well, with Fisher expecting revenue of NZD 2.3 billion and NPAT of NZD 460 million, implying 14% and 22% growth.

Fisher & Paykel is well-positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow, or NHF, therapy in the hospital division is priority, followed by targeting treatment of COPD in the homecare segment, and longer term, surgical technologies. What management terms “new applications” consists of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes leading to a shorter length of hospital stay and lower overall treatment cost.

Fisher & Paykel Healthcare's interim 2026 underlying EBIT grew 27%, driven by 15% higher hospital product sales and operating leverage. It lifted full-year revenue and net profit after tax guidance, which, along with the strong result, is likely why shares rose 5%.

Fisher & Paykel is well-positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow, or NHF, therapy in the hospital division is priority, followed by targeting treatment of COPD in the homecare segment, and longer term, surgical technologies. What management terms “new applications” consists of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes leading to a shorter length of hospital stay and lower overall treatment cost.

Fisher & Paykel Healthcare reiterated fiscal 2026 revenue guidance of NZD 2.15 billion-NZD 2.25 billion and NPAT guidance of NZD 390 million-NZD 440 million. The first half is tracking well, with Fisher expecting NZD 1.08 billion in revenue and NPAT of NZD 200 million, implying 13% and 31% growth.

While pharmaceuticals are still exempt from US tariffs, President Donald Trump has threatened a potential 200% tariff on these imports, perhaps from 2027. Reciprocal tariffs announced prior have also been delayed by a month to Aug. 1, 2025. Australian healthcare stocks barely reacted.

Fisher & Paykel is well-positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow, or NHF, therapy in the hospital division is priority, followed by targeting treatment of COPD in the homecare segment, and longer term, surgical technologies. What management terms “new applications” consists of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes leading to a shorter length of hospital stay and lower overall treatment cost.

Fisher & Paykel Healthcare's fiscal 2025 underlying EBIT grew 28%, driven by 18% higher hospital consumables sales and operating leverage. Gross margin was a highlight, expanding 130 basis points to 63% on manufacturing efficiencies and reduced freight costs.

President Donald Trump unleashed a barrage of reciprocal tariffs on US trading partners that were more expansive and aggressive than the market was expecting. Pharmaceuticals are exempt for now but most medical devices are affected. Australian healthcare stocks broadly reacted negatively.

Fisher & Paykel is well-positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow, or NHF, therapy in the hospital division is priority, followed by targeting treatment of COPD in the homecare segment, and longer term, surgical technologies. What management terms “new applications” consists of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes leading to a shorter length of hospital stay and lower overall treatment cost.

Fisher & Paykel is well-positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow, or NHF, therapy in the hospital division is priority, followed by targeting treatment of COPD in the homecare segment, and longer term, surgical technologies. What management terms “new applications” consists of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes leading to a shorter length of hospital stay and lower overall treatment cost.

The United States announced a 25% tariff on products imported from Mexico from Feb. 4, 2025. We estimate roughly 42% of narrow-moat Fisher & Paykel’s full-year revenue is attributable to the US, and approximately 60% of US volumes are supplied from Mexico. As a result, we decrease our fiscal 2026 gross margin forecast by roughly 230 basis points to 60.9% versus an estimated 62.3% in fiscal 2025. However, we leave our midcycle gross margin forecast of 65% unchanged, consistent with Fisher’s long-term target. The firm intends to mitigate the impact of tariffs through cost reductions, manufacturing efficiencies or price increases over time. We maintain our NZD 25 fair value estimate, or AUD 23, at current exchange rates.

Narrow-moat Fisher & Paykel’s first-half fiscal 2025 revenue grew strongly, up 17% to NZD 951 million, while net profit after tax rose 51% to NZD 153 million, both largely tracking our expectations. Management reiterated fiscal 2025 revenue guidance of NZD 1.9 billion-NZD 2.0 billion and fiscal 2025 NPAT guidance of NZD 320 million-NZD 370 million, versus our respective little-changed forecasts of NZD 1.95 billion and NZD 335 million. The guidance implies a typically stronger second half reflective of the US flu season. We maintain our NZD 25 per share fair value estimate, or AUD 23 at current exchange rates.

Fisher & Paykel is well-positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow, or NHF, therapy in the hospital division is priority, followed by targeting treatment of COPD in the homecare segment, and longer term, surgical technologies. What management terms “new applications” consists of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes leading to a shorter length of hospital stay and lower overall treatment cost.

Fisher & Paykel is well-positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow, or NHF, therapy in the hospital division is priority, followed by targeting treatment of COPD in the homecare segment, and longer term, surgical technologies. What management terms “new applications” consists of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes leading to a shorter length of hospital stay and lower overall treatment cost.

Narrow-moat Fisher & Paykel Healthcare has made steady progress in early fiscal 2025. Management reiterated fiscal 2025 revenue guidance of NZD 1.9 to 2.0 billion but increased fiscal 2025 net profit after tax guidance by 3% at the midpoint to NZD 320 to NZD 370 million. We think the market reacted favorably to improved profitability on a constant-currency basis, with the firm continuing to focus on gross margin improvement initiatives. However, the guidance assumes exchange rates on July 31, 2024, will persist. Since then, the US dollar has weakened roughly 4% against the New Zealand dollar, a headwind for reported earnings. We maintain our NZD 25 fair value estimate for narrow-moat Fisher & Paykel Healthcare, or AUD 23 at current exchange rates.

Fisher & Paykel is well-positioned to benefit from long-term growth prospects in hospital and home respiratory care. Increasing adoption of nasal high flow, or NHF, therapy in the hospital division is priority, followed by targeting treatment of COPD in the homecare segment, and longer term, surgical technologies. What management terms “new applications” consists of non-invasive ventilation, NHF therapy, and surgical humidification. Of these, we see the NHF devices and consumables, which are marketed under the Airvo/Optiflow label, as having the most potential reach. The benefits of NHF therapy delivered via nasal prongs include better clinical outcomes leading to a shorter length of hospital stay and lower overall treatment cost.

We raise our fair value estimate for narrow-moat Fisher & Paykel Healthcare by 6% to NZD 25 per share, or AUD 23 at current exchange rates, due to the time value of money and a stronger result than we expected. Fiscal 2024 revenue rose 8% in constant-currency terms to NZD 1.7 billion, driven by strong consumables demand, and was 1% higher than our forecast. Underlying group EBIT rose 10%, constant-currency, to NZD 373 million, and was 4% above our forecast. In addition to slightly higher revenue, the result was driven by good cost control and better-than-expected gross margin expansion.