- Philips reported third quarter results well ahead of expectations, with a 22% EBITA-level beat driven by COVID-19 demand for ventilators and monitoring equipment.
- Hospital capex budgets have been scrambled by COVID-19, leading to weaker orders for imaging equipment, and this is likely to stretch through 2021.
- Hospitals are prioritizing more lucrative elective procedures (and capex that can facilitate them), and Philips reported that procedure counts had nearly returned to pre-COVID-19 levels by quarter-end.
- I expect accelerating revenue growth and improving margins from Philips over the next five years, and I believe the shares are more than 15% undervalued.
For further details see:
Philips Still Reaping A COVID-19 Tailwind, As Procedure Counts Recover