Pro Medicus has signed a $10m contract over seven years with a major teaching hospital in Germany.

It is one of the largest university hospitals in Europe and the contract will see the company's Visage 7 technology implemented across radiology and other sub specialties imaging departments (like cardiology).

Morgans believes this contract win speaks to the quality of the company's software as Pro Medicus was competing against the IT platform from a large multinational which provides both hardware and software.

The broker expects FDA clearance for the company's breast density software before the end of 2020. This is considered a major catalyst.

Morgans makes no changes to forecasts, but believes companies like Pro Medicus with leading edge software are well placed to keep winning contracts. This is because the enterprise imaging sector is poised to grow well above GDP.

The Hold rating is unchanged and the price target is increased to $33.32 from $30.43.

Sector: Health Care Equipment & Services.

Target price is $33.32.Current Price is $31.23. Difference: $2.09 - (brackets indicate current price is over target). If PME meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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