The share price of cancer treatment specialist Sirtex Medical Limited (ASX: SRX) continues to soar as a range of credible brokers raise their valuations for the business. The stock is up 52 per cent over the past year and 260 per cent over the past three years.
If Sirtex shares edge a little higher it will almost certainly join the S&P/ASX 100 Index (ASX: XTO) of leading companies, joining other healthcare legends like CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH).
Sirtex sells doses of a specialist radiotherapy known as SIR-spheres to primarily treat advanced stage liver cancer in patients.
It also has several clinical trials in progress aimed at providing the clinical evidence to promote greater sales of the radiotherapy for a wider range of cancers and at earlier stages of those cancers onset.
If the company is successful in persuading the global community of oncologists of the merits of its treatments for a wider range of patients then dose sales could continue growing at a big rate long into the future.
At its recent AGM, the chief executive Gilman Wong forecast dose sales growth of at least 19.7 per cent in the year ahead.
This week investment bank UBS Warburg reacted by slapping a 12-month DCF price target of $50 on the business. UBS suggesting that Sirtex's SARAH, FOXFIRE & FOXFIRE Global trials have the potential to expand its addressable market by 10x over the next five years.
UBS's base case target is assuming 20 per cent sales growth, although it also has a bull case price target of $63.15, assuming a 25 per cent sales growth rate if Sirtex can crank dose sales faster than expected.
Other credible brokers like Macquarie Group Ltd (ASX: MQG) have a $42 price target on the stock, while US investment bank Goldman Sachs has a $40 share price target. Today the shares sell for $39.40 and remain a high-risk growth opportunity for investors looking to gain exposure to the healthcare sector and overseas earnings.
