![UBS healthcare analyst Andrew Goodsall photographed in 2005, back in his Citi days.](http://web.archive.org./web/20170827162830/http://www.afr.com/content/dam/images/g/y/5/6/0/n/image.related.afrArticleLead.620x350.gy55pm.png/1503819277263.jpg)
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While we're on Estia, UBS continues its comedy of errors – of fact and of judgment – on the aged care roll-up the Swiss investment bank helped list in December 2014.
Matthew Grounds' sell-side healthcare research team, led by marquee analyst Andrew Goodsall, has played an absolute blinder! To recap: until April 19 last year, its 12-month price target on the stock was $8.65. By the May, it was $8.15, still 33.2 per cent higher than its peers' consensus of $6.12, and the actual price of $5.32. This was when Perpetual began climbing up the register, later described by its head of equities Paul Skamvougeras as "the worst investment I have ever made".
By July, UBS' estimation of fair value was $6.95. The stock had dropped below $4. By September, UBS was down to $6.57 and the shares were at $2.92. They closed last week at $3.15 with Goodsall's price target at $3.50. Hey, at least he's getting closer.
Though not on Estia's other numbers. After Estia chief Norah Barlow reported full-year earnings on Friday, UBS issued research containing valuation methodology whose inputs were just simply wrong. Goodsall used a share count of 226 million (the weighted average for FY17), which is the correct input for earnings per share but 13.2 per cent short of the 260.6 million ordinary Estia shares on issue, leaving UBS' enterprise value to core earnings valuation of 8.4 times also dead wrong – a painfully crude mistake in research marketed and sold as expert. And this is after Goodsall mis-stated Estia's diluted (or theoretical ex-rights) price in his note of December 12.
Remember that Goodsall's Sirtex price target was $30.30 as recently as April (when Sirtex shares were trading at $14.80), $27.45 in May (when its shares were $11.77) and as of Thursday, $24.80 (the shares are now $14.81). In October, Goodsall's Mayne Pharma price was $2.30, though it's since edged down to $1.55. Mayne's shares closed Friday at 68¢. Has this bloke ever seen a healthcare stock he didn't think was a buy?