To The Moon

Telix (TLX.AX) – What Just Happened? A Quick Summary for Investors

A couple of seemingly conflicting reports have dropped this week regarding Telix Pharmaceuticals, so here’s a plain-English breakdown of what’s going on, what it might mean, and where things could go from here.

🧾 The News

Morningstar Cuts EBIT Forecasts (6 Aug – Reuters)

Morningstar reduced its EBIT (earnings before interest and taxes) forecasts for Telix by an average of 29% over the next two years.

Reason: Delays in cost efficiencies from Telix’s recent US acquisition of RLS Radiopharmacies.

Operating Expenses (OPEX) for H1 FY25 are now forecast at 36% of revenue, up from 28% last year (though some investor analysis suggests last year’s figure was closer to 93%, raising questions).

Despite the lowered EBIT forecasts, Morningstar maintained its $19.50 fair value estimate and said the market is likely undervaluing Telix’s US strategy.

Bell Potter Reaffirms Buy Rating (6 Aug – Motley Fool)

Bell Potter argues the recent share price drop presents a buying opportunity.

They note that despite the "triple whammy" of:

Pixclara’s Complete Response Letter from the FDA,

An SEC probe into Telix’s prostate cancer therapy trials,

And now, higher than expected OPEX…

…Telix still posted record sales, and its key products (like Zircaix for renal cell carcinoma) are on strong regulatory footing.

Bell Potter retains its Buy rating and trims its price target from $34 to $33, suggesting up to 80% upside from current levels.

🤔 The Confusion Around OPEX

Morningstar cites 28% OPEX-to-revenue last year.

Many investors (myself included) found this puzzling, as company filings appeared to show OPEX closer to 93% of revenue in FY24.

An email requesting clarification has been sent to the Reuters journalist, Shivangi Lahiri. Awaiting reply.

Regardless, the 36% OPEX forecast for H1 FY25 is being taken by the market as unexpectedly high.

📈 Investor Takeaway

TLX has sold off sharply (~25% YTD), but broker coverage remains bullish.

Morningstar sees undervaluation.

Bell Potter sees major upside from here, especially if:

Regulatory catalysts hit (Zircaix approval),

The market re-rates Telix post-investigation clarity,

OPEX stabilizes post-integration of recent acquisitions.

📌 Final Thought: For long-term holders, this could be a classic case of “short-term noise vs long-term value.” But the market clearly wants cleaner numbers and fewer surprises.