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Why Novacyt is a buy at current levels
With a current market cap of ca. £744 M, Novacyt ( #NCYT #ALNOV #NOVACYT) looks very cheap compared to analyst fait value estimates of £1bn & stock price between 1,365p (€15) and 1,463p (€16).
Current wave of COVID cases…
With a current market cap of ca. £744 M, Novacyt ( #NCYT #ALNOV #NOVACYT) looks very cheap compared to analyst fait value estimates of £1bn & stock price between 1,365p (€15) and 1,463p (€16).
Current wave of COVID cases…
… is worse than previous ones while Novacyt’s revenue and profit estimates are conservative. Based on current virus trends, it is likely these estimates will be beaten.
With the recent PCR test increase announced by Boris Johnson, it is likely UK contract will most likely be used in its fullest capacity (£406M + £63.4m).
New products such as Winterplex, EXSIG solutions and Neat Patient Testing were introduced in H2 and will provide significant sources of new revenues on top of H1.
PCR tests are now accessible in both private and public health practices in the UK and the rest of the world, with some countries clearly lacking the supply in tests (Germany for example is one of Novacyt’s biggest markets)
As the fight against coronaviruses intensifies and remains difficult, PCR testing is set to become a major market in the years to come. Even with a vaccine, PCR tests will remain essential tools to fight coronaviruses.
When the economy re-opens PCR tests will be key to the successful re-opening of economies, suggesting a significant demand from private and public organisations.
Sectors such as hotels, cruises, air travel, sports, events will require PCR tests in order to regain customer confidence and for their activity to restart.
For the above reasons and the likelihood of further contracts and new products announced soon, I believe Novacyt is an excellent buy at current levels.
