Ebos Earnings: Shares Are Expensive as Margin Pressure Mounts

Narrow-moat Ebos reported fiscal 2024 revenue of AUD 13.2 billion and underlying EBITDA of AUD 624 million, up 8% and 7% respectively, in line with our expectations. The result was driven by acquisitions and 12% revenue growth in Ebos’ institutional segment due to growth in its hospitals and medical technology businesses. We maintain our fair value estimate of AUD 28.50 (NZD 31.50), and our long-term earnings estimates are broadly unchanged. Our fiscal 2025 underlying EBITDA forecast of AUD 583 million is within management’s guidance range of AUD 575 million to AUD 600 million. Shares remain overvalued with earnings set to rebase lower following its Chemist Warehouse contract ceasing at fiscal 2024 year-end.