The Ansell Limited (ASX: ANN) share price has slipped to a new 52-week low today. Unfortunately for shareholders, this deepens Ansell’s fall from grace. It was only four months ago when the health and safety protection solutions company hit a 52-week high of $44.07.
At the end of Monday’s session, shares in the company finished at $31.30, down 1.07% from their previous close. This means the Ansell share price is now down approximately 29% from its 52-week high milestone.
Let’s have a closer look at what has been happening at the $4.1 billion company.
Going out of fashion
It is perplexing to think a company that delivered strong revenue and earnings growth in its FY21 full-year results is suffering a share price decline. However, that is exactly the case for personal protection equipment (PPE) manufacturer, Ansell.
In August, the company posted a 25.6% increase in sales to US$2 billion. Meanwhile, net profit after tax (NPAT) jumped a staggering 57% year-over-year to US$338 million. Certainly not bad growth for a healthcare company that is 92 years old.
However, the growth story was largely a beneficiary of the COVID-19 pandemic, which created a surge in demand for PPE across the globe. Now, as vaccination rates reach re-opening levels, investors are worried the tailwind might be reversing. Hence, the market is applying downwards pressure to the Ansell share price.
As we recently covered, analysts from Macquarie have shared this perspective in its latest broker note. Essentially, the broker foresees a softening in demand for PPE. Consequently, Ansell is predicted to have difficulty raising prices to offset increasing costs being observed with inflation.
As a result, Macquarie suspects the company might fall short of earnings estimates for FY2022. In response, the broker has applied an underperform rating on the company with a $32 share price target for Ansell.
Ansell share price recap
Although Australia is only now beginning to emerge from its broad lockdowns and restrictions, the Ansell share price has been falling since June. Meanwhile, over the past 12 months, the company’s shares have sunk 23% in value. In contrast, the S&P/ASX 200 Index (ASX: XJO) has gained 20.9% during that time.
Having said all that, it is worth mentioning that Ansell is currently trading on a trailing 12-month price-to-earnings (P/E) ratio of 12.6 times. Likewise, the company is boasting a 3.2% dividend yield.