When the half year results come out people will realise how...

When the half year results come out people will realise how oversold this has been.

2016 guidance provided in Aug:
Sonic expects EBITDA of A$815-840M for FY2016 on a Constant Currency basis (applying 2015 average currency exchange rates to translate offshore earnings for 2016), equivalent to A$850- 875M at current exchange rates.

Medicare fee cuts:
Should these measures come into force – and without mitigating actions – our initial estimate is that they would impact Sonic Healthcare’s Australian laboratory revenues by approximately 3.5% and Sonic’s imaging revenues by approximately 2.7%, with a total revenue impact of approximately A$50 million per annum. With no mitigating actions at all, we estimate that the impact on Sonic’s total EBITDA would be in the order of 5-6% for the FY2017 year.

Given the AUD is tanking we can expect the EBITDA for FY16 to be north of $840m. The $815-840m expectation was @ 20% growth on FY15.
At worst we will then lose 5-6% EBITDA (if changes go through) reality is SHL will be bale to recoup/oncharge some of this... would expect perhaps a 2-3% hit to EBITDA in FY17 (thereby reducing EBITDA from A$1b to A$970-980m

If all the above is to be believed we are currently trading at just over 7* EBITDA for FY17.

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