Aroa Biosurgery's March Q cashflow report was broadly in line with Morgans' expectations. it appears that the re-alignment of product shipments to TELA Bio, as it right-sizes its inventory holding, is now complete.

This should see Aroa sales to TELA Bio re-align to its sales trajectory, the broker notes. TELA Bio is guiding to 27-30% growth year on year.

Morgans believes that compared with domestic peers Aroa is trading at attractive levels, and recent international M&A activity in the
wound care space supports a higher valuation. Add and $1.20 target retained.

Sector: Pharmaceuticals, Biotechnology & Life Sciences.

Target price is $1.20.Current Price is $0.50. Difference: $0.70 - (brackets indicate current price is over target). If ARX meets the Morgans target it will return approximately 58% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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