An analyst at Forsyth Barr has raised her target price for shares in Ebos and raised her investment recommendation from neutral to outperform.
Chelsea Leadbetter said the pharmaceuticals and medical products distributor is best-in-class with higher margins, superior working capital management and more diversified earnings than its listed peers.
Ms Leadbetter expected Ebos shares to reach $10.65 over the next 12 months from $9.25 when she released her report.
She said Ebos has a strong market-leading position in Australasia in wholesaling and distributing prescription and over-the-counter drugs and consumer products to pharmacies and hospitals.
While it is a high volume, low margin business, Ms Leadbetter said Ebos can leverage cost efficiencies from technology and modest revenue growth.
She said the company is also experienced in dealing with regulatory changes in both Australia and New Zealand.
Ebos has made 20 acquisitions in the last 13 years and Ms Leadbetter says she expects it to buy more businesses.
She estimates it has more than $300 million headroom available from its banking facilities and said Ebos had shown a willingness to raise capital in the past.
