** Citi upgrades the rating on the stock of Australia's Sonic Healthcare SHL.AX to 'neutral' from 'sell'

** "Risk-reward looks more balanced" - Citi

** Brokerage says the medical diagnostics services provider 'outperforms' industry backdrop in Australia in 1H26

** However, flags potential underperformance in US business, cost pressures for co; lowers PT to A$21.5 from A$22

** Five of 14 analysts rate the stock "buy" or higher, seven "hold" and two "sell" or lower; their median PT is A$25.3 – LSEG data

** Stock down 9.1% YTD

(Reporting by Aamir Sheik Khalid in Bengaluru)

((Aamir.SheikKhalid@thomsonreuters.com))