This report is the updated version of the report uploaded on 20 August 2024 at 5:36 PM (GMT +13)

 EBOS Group Limited (NZX: EBO)

EBOS Group Limited (NZX: EBO) is a marketer, wholesaler and distributor of healthcare, medical and pharmaceutical products.

Recommendation Rationale – SELL at NZD 37.70 

• The company’s business is exposed to the risks related to the inflationary environment. It might witness increases in some of the key cost items to varying degrees throughout its businesses.
• Also, the company might witness higher net finance costs in the upcoming periods as a result of higher net debt or due to any acquisition.
• Some other critical risks include global economic slowdown, macro-economic tensions, geopolitical uncertainty, regulatory challenges, etc.
• EBO’s share price is trading near the R1 level recommended on July 29, 2024. Therefore, there can be a possible decline from the specified resistance levels.

EBO’s Daily Price Chart

Fundamental Valuation: 

P/E Based Relative Valuation

Considering the factors mentioned above, EBO is expected to trade at slight discount. For conducting the valuation, the following peers have been considered: Sigma Healthcare Ltd (ASX: SIG), Paragon Care Ltd (ASX: PGC), etc.

Given its current trading levels, recent rally in the share price, and risks associated, it is prudent to book profit at the current levels.

Hence, a ‘Sell’ rating has been provided on the stock at the current price of NZD 37.70 per share as on 20^th August 2024 (New Zealand Time: 12:00 PM (GMT +13))

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 20 August 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest. 

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.