The Sonic Healthcare Limited (ASX: SHL) share price is having a strong session this hump day.
At the time of writing, shares in the medical diagnostics company are trading for $40.73, up 3.77%. For context, the S&P/ASX 200 Index (ASX: XJO) is practically even on yesterday’s close.
The company hasn’t released any price sensitive news recently. So, what’s going on?
Let’s take a closer look.
Could learning to ‘live with COVID’ be the reason?
Since the first case of the delta variant of COVID in late June, thousands upon thousands of cases have been detected across the Australian mainland – shutting down New South Wales, Victoria, and the ACT for extended time periods.
But those days are over.
NSW and Victoria are out of lockdown and the ACT is practically there. Quarantine for international travel will also soon be a thing of the past. Australia has become a highly vaccinated country and is learning to live alongside the insidious virus.
Part of living with the virus means testing — and Sonic is the largest private testing provider in the country. It’s raked in millions of dollars from government as people get tested by the tens of thousands. The Sonic share price had a massive rise during this latest outbreak. It’s jumped 10.9% since the original case was detected in the Sydney limo driver.
Testing, contact tracing, and isolating positive COVID patients will still be a part of the Australian response to the disease.
As well, the Commonwealth government has today revealed the end of Australia’s closed border policy. Come 1 November, Australians will no longer need a reason to leave the country. The date coincides with the day NSW and Victoria end all quarantine requirements for vaccinated travellers.
However, to fly overseas, passengers will need to conduct a PCR (polymerase chain reaction) test within 72 hours before departure. These tests can only be done in a clinical setting, meaning Sonic’s revenue stream is not drying up anytime soon.
Investors may be jumping on this news, thus, potentially leading to a rising Sonic share price.
Sonic share price snapshot
Over the past 12 months, the Sonic share price has risen 13.5%. Since the start of 2021, shares in the medical company have risen 26.5%. Its 52-week high is $43.99 and its 52-week low is $30.21.
Sonic Healthcare has a market capitalisation of approximately $19.5 billion.