The Pro Medicus Limited (ASX: PME) share price was a positive performer last week.
In response to the health imaging technology company's full year results, it shares recorded a weekly gain of 4.2%.
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Can the Pro Medicus share price keep climbing?
One leading broker still sees value in the Pro Medicus share price at the current level.
According to a note out of Morgans, its analysts have retained their add rating and lifted their price target on the company's shares to $58.18.
Based on the current Pro Medicus share price of $54.17, this suggests potential upside of 7.4% for investors over the next 12 months.
What did the broker say?
Morgans was impressed with Pro Medicus' full year results and particularly its margins. Thanks to further operating leverage, the latter came in well-ahead of expectations. It commented:
PME recorded another year of strong growth across all metrics with the key highlight being further EBIT margin expansion to 67% (+400 bps on the pcp) well above expectations, highlighting the operating leverage of the business.
The broker also highlights that the company's outlook remains as bright as ever. It said:
Outlook remains as strong as ever, highlighted by an increasing number of requests for tender proposals and more renewals from existing customers. The five-year forward contract value is up 31% to A$420m.
And while Morgans acknowledges that the Pro Medicus share price is not cheap at current levels, it believes the company's quality and outlook justifies this.
It's an impressive story, and one which we view with longevity. While currently fairly priced, we continue to view this as a strong long-term growth story which will continue to grow into its high multiple. Buyers on any weakness – it's typically shortlived.
