The Integral Diagnostics Ltd (ASX: IDX) share price opened 0.02% at $2.65 this morning. Over the past year, the company's shares have risen 6.85%.
For context, the S&P/ASX All Ordinaries Index (ASX: XAO) is 0.59% lower this morning. Over the year, the index is 7.69% higher.
Image source: Getty Images
What is Integral Diagnostics?
Integral Diagnostics provides diagnostic imaging to general practitioners, medical specialists, and allied health professionals and their patients.
The company operates more than 90 radiology clinics across Australia and New Zealand. It is also a joint venture partner in Medx, expanding its services to the United Kingdom and Ireland.
What does Macquarie think of the stock?
In a recent note to investors, the broker confirmed its outperform rating on Integral Diagnostics shares and $3.20 target price. That represents a potential 20.8% upside for investors over the next 12 months.
"Our key pick is IDX (OP) as the only pure-play imaging stock, benefiting from mix shift, indexation with further regulatory tailwinds from FY26e," Macquarie said.
Data shows that volumes for all healthcare services increased in H2 2025, except face-to-face GP.
"[face-to-face GP] continues to lag, down -1% vs pcp. From 1-Nov-25, there will be another $7.9bn in govt funding expected to expand bulk billing eligibility to support GP bulk billing," the broker said.
Macquarie expects the boost in government funding to improve GP volumes, and therefore, imaging and pathology referrals.
Surgery, base pathology, and imaging volumes all grew in 2H25, up by low single digits of 3%, 4%, and 3%, respectively.
"Imaging benefits +8% vs pcp, continuing to be supported by mix shift to higher fee modalities and indexation, driving benefits growth ahead of volume growth, which was up +3% vs pcp," the broker said in its note.
On a 3-month rolling basis, imaging benefits are 6% higher. On a 6-month and 12-month rolling basis, imaging benefits are 8% higher.
Elsewhere, pathology also grew in H2 2025, up 5% versus the prior period. Pathology benefits were flat in June 2025 versus the prior period, resulting in pathology benefits in H2 2025 moderating to 5% for the year to June, the note explains.
But there could be risks ahead
While Integral Diagnostics is Macquarie's top pick for the sector, the broker notes there are some key downside risks to its thesis.
"[These] primarily relate to weaker-than-expected volume growth, and/or operating cost growth ahead of our expectations. Downside from the potential merger would be less-than-expected cost synergies from the Group."
