Monash IVF Group Ltd (ASX: MVF) shares have had a tough couple of years.
Since this time in 2024, the ASX fertility stock has lost almost 50% of its value.
Does this make its shares good value today? Let's see what Bell Potter is saying about the company and its shares.
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What is the broker saying about this ASX stock?
Bell Potter notes that trading conditions remain challenging for the fertility treatment company. As a result, it was not surprised with its recent guidance downgrade. It said:
MVF's lower guidance is not really surprising given the Medicare data that has led the way through the 10 months to April, with no sign of material improvement in May or June. MVF has lowered guidance for U.NPAT to $17m – $18m from a range of $20m to $23m previously. BP was at $20m. The c.15% downgrade reflects an environment where Australian Stimulated Cycles on a R12M basis are c.-1.9% with market conditions being quite difficult over the past two years. The fact that R3M data indicated a decline of c.-4.7% only emphasises the point.
One positive is that the ASX stock has reported improvements in its market share. It adds:
Countering this is the improvement MVF is starting to see in its market share. It is early days in the tenure of the new CEO but the 100bp improvement in market share to c.20.1% on a R3M basis indicates stabilisation of a business that has been challenged by a combination of brand issues and cost of living pressures. Indeed, the lower guidance we suggest is more about the macro settings than previous brand issues. Another bright spot is the international business that is continuing to grow and is expected to print materially higher volumes in 2H26 over pcp.
Should you invest?
According to the note, the broker thinks investors should keep their powder dry for the time being.
In response to the guidance update, Bell Potter has retained its hold rating and 75 cents price target. Based on its current share price of 71 cents, this implies only modest upside of 5.5% over the next 12 months.
Commenting on its recommendation, the broker said:
We have adjusted our earnings estimates for FY26 only at this stage to reflect the bottom of the lower guidance range, although revenue for FY27e / FY28e is rebased. MVF advise that its cost out and efficiency initiatives are underway, but implementation comes too late to impact the FY26 result.
We assume that earnings shall remain flat compared with prior estimates which implies MVF need to deliver material efficiencies and cost savings, as we expect the top line to remain challenging. A material cost out programme would be well received by the market, given undemanding multiples. We retain our $0.75 TP and HOLD recommendation.
