Analyst Note| Shane Ponraj, CFA |
We maintain our AUD 1.55 fair value estimate for no-moat Australian Pharmaceutical Industries, or API, after the company lifted fiscal 2021 underlying EBIT guidance by 4% to about AUD 70 million. API’s earlier guidance range of AUD 66 million to AUD 68 million assumed Sydney lockdown restrictions would remain in place until July 31, 2021. Despite the lockdown persisting longer as we expected, trading performances at suburban and regional Priceline pharmacies and online were stronger than the company projected. API also experienced elevated volumes through its pharmacy distribution business that it did not anticipate. Accordingly, we increase our fiscal 2021 underlying EBIT forecast by 10% to AUD 70 million but leave our long-term estimates broadly unchanged.