Fisher & Paykel Healthcare: Limited Recall Doesn’t Impact Our Long-Term View
We maintain our NZD 23.50 fair value estimate for narrow-moat Fisher & Paykel Healthcare, or AUD 22.00 at current exchange rates, following the firm initiating a voluntary limited recall of Airvo 2 and myAirvo 2 devices manufactured before Aug. 14. 2017. Luckily, these devices were sold well before elevated covid demand, and as such Fisher estimates there are only around 9,000 affected devices remaining in use. The company launched Airvo 3 in May 2022. This compares with Philips’ recall of 5.6 million devices. The company estimates NZD 12 million in one-off costs associated with the recall that will be provisioned for in fiscal 2024. This does not impact our investment thesis, and we leave our long-term estimates broadly unchanged.