HOLX - Hologic Emerges A Winner From Covid-19 Exposure

• Hologic has had a stellar 2020 on the back of servicing enormous global Covid-19 testing volumes, and contract manufacturing agreements have just been extended to 2021.
• Management has updated guidance for 2021, where Covid testing revenues will widen the capital allocation potential into their molecular diagnosis segment.
• The company serviced around 32% share of total Covid-19 testing volumes in Q4, with a 50% increase in capacity planned for 2021.
• We believe further upside is likely, as investors continue to reward the company by the FCF generated from testing sales and recovery in other segments.
• We see a fair value of ~$83, and set a 6 to 12-month price target of $81, representing around 12%-10% upside on today's trading.

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