So the hammer has landed, and then, in the case of Mexico, was promptly retracted. While a similar fate for Canada is still on the table, Canadian health company WELL Health Technologies (TSE:WELL) believes that the tariffs do not particularly matter either way. That confidence sent shares up nearly 1.5% in Monday morning’s trading.
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So while the tariffs may end up delayed, briefly, or carrying on in earnest, WELL Health believes that it can keep going regardless. One of the biggest reasons that it believes this is that it has no “cross-border sales” going into the United States. That is a compelling reason; if you do not sell into the United States, then you have little to fear from tariffs established into that country. Except….
Except, of course, for the entire concept of “knock-on effects.” Knock-on effects are secondary or cumulative effects that can hit in unexpected directions. If WELL Health’s customers suddenly lose their ability to buy WELL Health products because the tariffs hurt their own sales to the United States, then WELL Health, whether it sells to the United States or not, may find itself just as much impacted.
Other Advantages
Still, not being hit by the tariffs directly will likely help it going forward. There are some other effects contributing to WELL Health’s overall health as well. One big one is recent improvements in efficiency, which is driving greater profitability. If the tariffs prompt a reduction in profitability, that should reduce WELL’s profitability from new comparative highs.
Better yet, WELL’s recently-acquired clinics are driving gains, with 165 total now producing $440 million annually in revenue. Another 19 signed letters of intent worth about $50 million themselves are set to come online directly. Plus, WELL has a substantial presence within the United States itself, selling into the United States market. Reports note that better than 60% of its revenues, cashflow, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) comes from the United States, in United States dollars.
Is WELL Health Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:WELL stock based on seven Buys and one Hold assigned in the past three months, as indicated by the graphic below. After an 64.48% rally in its share price over the past year, the average TSE:WELL price target of C$9.01 per share implies 49.42% upside potential.
