Fisher & Paykel Healthcare Surges on Strong FY26 Earnings and Robust FY27 Guidance

Fisher & Paykel Healthcare Corporation Limited (FPH.NZ) has delivered a robust operational performance for the full year ended 31 March 2026, triggering a sharp upward re-rating in its share price. As of Thursday, 28 May 2026, the company's shares are trading at 37.75, representing a significant 13.43% surge over the past week and a 5.26% increase over the last month. This strong market momentum follows the release of the company's full-year results and an optimistic guidance range for the 2027 financial year, projecting operating revenue between NZ$2.45 billion and NZ$2.57 billion alongside net profit after tax of NZ$500 million to NZ$550 million. Supported by structural demand, margin recovery, and successful product adoptions in key international markets, the medical devices developer has solidified its position as a high-growth defensive cornerstone on the New Zealand Exchange.

Company Overview

Fisher & Paykel Healthcare Corporation Limited operates as a leading global designer, manufacturer, and marketer of products and systems designed for use in acute and chronic respiratory care, surgery, and the treatment of obstructive sleep apnea. The organisation holds a dominant position in the medical devices sector, currently commanding a market capitalisation of NZ$19.77 billion. Its business model is bifurcated into two primary operating segments: Hospital and Homecare. The Hospital division is characterised by its market-leading humidifiers, high-flow nasal cannula systems, and associated single-use consumables, while the Homecare division focuses on CPAP therapy devices and innovative obstructive sleep apnea mask systems. Manufacturing is concentrated in high-efficiency facilities in New Zealand and Mexico, supporting a massive distribution network spanning over 120 countries.

Financial Metrics

The company's financial results for the full year ended 31 March 2026 demonstrate a strong return to profitable growth. Operating revenue reached NZ$2.31 billion, representing a 14% increase from the prior year, or 12% growth in constant currency terms. This top-line expansion translated into an even stronger bottom-line result, with net profit after tax surging 24% to NZ$468.5 million, marking an increase of 28% in constant currency terms.

Profitability metrics showed substantial improvement. The gross margin expanded to 63.7% for the period, representing a 122 basis points increase in constant currency, driven by manufacturing efficiencies and an optimised product mix. Simultaneously, the operating margin climbed to 27.6%, up 277 basis points in constant currency. These margin improvements highlight the business's inherent operating leverage as global supply chains normalise and capacity utilisation rises.

In terms of segment performance, Hospital revenue grew by 18% to NZ$1.50 billion, which represents a 15% constant currency increase. This was primarily propelled by a 27% constant currency rise in hospital hardware sales, highlighting exceptional demand for the Airvo 3 and F&P 950 systems in the United States. Homecare revenue reached NZ$802.7 million, reflecting an 8% increase, or 7% in constant currency, which was heavily supported by the continued global rollout of new obstructive sleep apnea mask ranges.

Fisher & Paykel Healthcare continues to exhibit a highly resilient balance sheet. The company's debt-to-equity ratio stands at a low 3.1%, providing it with immense financial flexibility. Operating cash flow for the year increased 21% to NZ$663 million, reinforcing its capacity to self-fund capital-intensive growth programmes. Capital expenditure for the period rose to NZ$195 million, up from NZ$103 million in the previous year, and is forecast to increase to approximately NZ$230 million for the 2027 fiscal year. This capital will be deployed toward continued facility expansion at the East Tāmaki campus and land purchases in Karaka to support long-term capacity requirements.

Reflecting this financial strength, the annual dividend declared for the full year was hiked by 22% to 52.0 NZ cents per share. This represents a payout ratio of approximately 65% of the full-year net profit, yielding approximately 1.38% at the current share price of 37.75. The company's trailing price-to-earnings (P/E) ratio currently stands at 50.86, a premium multiple that reflects its market leadership and positive growth outlook.

Recent Catalysts

The primary catalyst behind the stock's recent price appreciation was the robust annual results announcement on 26 May 2026. The immediate market response was overwhelmingly positive, with the share price surging nearly 8% on the day of the release. Investors reacted favourably to both the strong underlying earnings growth and the higher-than-expected dividend declaration.

Furthermore, the positive operational outlook outlined during subsequent investor briefings on 26 and 27 May has acted as an ongoing catalyst. The market responded to the concrete financial targets set for the upcoming year, which outline continued double-digit growth. Strategic updates regarding the rollout of advanced hardware systems, specifically the Airvo 3 and F&P 950 systems in the United States hospital channel, have further reinforced confidence in the structural demand for the company's humidification technologies.

Technical Analysis

The recent post-earnings rally has significantly improved the technical posture of the stock. At the current share price of 37.75, the stock is trading comfortably above its 50-day SMA of 36.47 and its 200-day SMA of 37.50, signaling a confirmed medium-to-long-term bullish trend.

The short-term trend is equally supportive, with the price tracking well above the 20-day EMA of 35.42. This short-term moving average has acted as a key dynamic support level during the recent leg of the rally.

The RSI (14) of 62.7 signals a strong but neutral momentum profile. Crucially, the index remains below the overbought threshold of 70, suggesting that the stock has further technical headroom before consolidation is required. Meanwhile, the MACD is bullish with the MACD line crossing above the signal line, confirming strong upward momentum in the stock's price action.

Analyst Sentiment

Analyst sentiment surrounding Fisher & Paykel Healthcare remains overwhelmingly positive, with the consensus leaning toward a 'Buy' or 'Outperform' rating. Out of the active analyst pool, there are currently 9 buy ratings, 7 hold ratings, and 1 sell rating recorded.

Professional financial institutions have highlighted the company's impressive margin recovery as a key pillar for future valuation growth. Canaccord Genuity maintains a BUY rating on the company with a price target of AUD 36.50, which translates to approximately NZD 39.75. Across all major brokerages, the average analyst price target is calculated at approximately NZ$39.79, suggesting a potential upside of more than 5% from the current price of 37.75.

Risks and Outlook

While the long-term outlook for the medical devices manufacturer is strong, there are several key headwinds that management has flagged for the 2027 fiscal year. The primary near-term challenge relates to geopolitical and supply chain risks. Tariffs imposed by the United States on certain respiratory products, alongside Middle East conflict surcharges, are expected to create a gross margin headwind of approximately 50 to 70 basis points in the upcoming year.

Another operational risk is the potential moderation of hospital hardware sales. The exceptional 27% constant currency growth in hardware sales experienced during the 2026 financial year, driven by the aggressive US rollout of the Airvo 3 and F&P 950, may not be repeated. If hardware sales remain flat or decline in the next twelve months, top-line growth will rely more heavily on high-margin single-use consumables. Additionally, the company's extensive international footprint leaves it exposed to foreign exchange volatility, which can materially affect reported earnings when consolidating back into New Zealand Dollars.

In summary, Fisher & Paykel Healthcare's strong financial performance in the 2026 financial year has set a solid foundation for continued expansion. With operating revenue approaching the NZ$2.5 billion mark and margins expanding toward historical averages, the company continues to justify its premium valuation multiple. While investors must navigate potential headwinds from US tariffs and a potential cooling in hardware sales, the structural drivers of the global respiratory care and sleep apnea markets remain highly supportive of the company's medium-term earnings trajectory.