DAVY VIEW

Who knows where FY 2020 EPS for UDG Healthcare (UDG) will land; flat year-on-year (yoy)? -10% yoy? In many respects, this misses the point. We know that UDG’s balance sheet is in excellent shape, with leverage at just 0.3x net debt/EBITDA. We also believe UDG’s earnings power should remain intact once COVID-19 disruption dissipates. Previous guidance suggested that UDG was on track to deliver c.52c EPS. This is still a sensible number to frame medium-term investment discussions. The stock is trading on 15.2x this number, a c.25% discount to its five-year history. Detailed interims and investor call to follow on May 19th.