Pro Medicus Ltd (ASX: PME) shares closed the day up around 3% on Wednesday afternoon, at $184.83.
The increase means the shares have now jumped 13% over the past week alone. The latest rally has helped recoup some of the losses shed by the company over the past 12 months. But they're still down 17% for the year-to-date and 36% lower than 12 months ago.
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Why is everyone rushing to buy Pro Medicus shares this week?
The ASX healthcare company has come into focus this week after it announced two new seven-year contract wins.
On Monday, Pro Medicus announced its wholly owned US subsidiary, Visage Imaging, had signed a A$24 million contract with Billings Clinic – Logan Health in the US. The implementation will see Visage 7's entire platform integrated, including image distribution within the client's electronic health record system. Rollout planning is underway, aiming for a go-live date in early 2027.
The announcement was followed by news of a second contract deal on Wednesday. Pro Medicus announced a A$43 million contract with Virtua Health, also in the United States, for a unified imaging platform comprising Visage 7 Viewer, Workflow, Open Archive, and Cardiology products. Planning is underway and with a go-live date in around the second or third quarter of the 2027 calendar year.
The announcements have clearly been well received by investors.
The new contract wins continue a strong run of major client acquisitions and contract renewals this year.
They also come at a time when the broader healthcare sector is continuing to rebound after a difficult first-half to the calendar year.
Are the shares a buy, sell, or hold after the latest rally?
Most experts are still very optimistic about the outlook for Pro Medicus shares over the next 12 months.
TradingView data shows that the majority (nine out of 15) have a buy/strong buy rating on the shares. Another five rate the stock a hold, and one has a strong sell rating.
The average $212.74 target price sits around 15% above the trading price at the time of writing, implying a decent upside ahead over the next 12 months.
Some are even more optimistic and forecast the shares to jump up to 35% higher to $250 each within the next year, at the time of writing.
Citi recently renewed its buy rating on the shares with a $225 target.
The team at Morgans also think Pro Medicus shares are in the buy zone. They upgraded their rating to a buy with a $230 price target following its contract wins. The team commented that while the individual contracts in FY27 are modest, they're consistent in size, term, and scope. This helps to broaden the company's pipeline beyond large integrated delivery networks.
