In morning trade the Sonic Healthcare Limited (ASX: SHL) share price has edged higher following the release of a trading update at its annual general meeting.
At the time of writing the healthcare company's shares are up 0.5% to $21.70.
What happened?
At today's annual general meeting Sonic Healthcare's management reaffirmed its full-year earnings guidance after four months' trading.
According to the release, in FY 2018 it expects constant currency EBITDA growth in the region of 6% to 8% on FY 2017's $889 million.
This guidance excludes any benefits from future acquisitions and any negative impacts from proposed changes to U.S. Medicare fees. In respect to the latter, when these changes come into effect they are expected to impact Sonic Healthcare's EBITDA by less than 1%.
Furthermore, a sharp reduction in capital expenditure due to the completion of major infrastructure projects should lead to stronger cash flow generation this year.
Should you invest?
While things do look reasonably positive for the company once again, I still wouldn't be a buyer of its shares.
At a touch over 20x earnings I think Sonic Healthcare is fully valued given its current growth profile. Should its shares come down towards the 17x earnings level I would be interested, but until that happens I see more value in the shares of Ramsay Health Care Limited (ASX: RHC) and Zenitas Healthcare Ltd (ASX: ZNT).
