On Monday, Oppenheimer has adjusted its financial model for Integer Holdings Corporation (NYSE: NYSE:ITGR), resulting in a revised price target. The firm now values the medical device outsource manufacturer at $138.00, increased from the previous $135.00, while maintaining an Outperform rating on the stock. The target adjustment comes as ITGR trades near its 52-week high of $142.75, having delivered an impressive 34.91% return year-to-date.
The adjustment comes after Integer Holdings announced the divestiture of its Electrochem division, effective as of September 30, 2024. The analyst at Oppenheimer has shifted all fiscal year 2024 Electrochem revenues to discontinued operations and reallocated the remaining revenues to their respective business units. According to InvestingPro data, the company maintains strong financial health with a 'GREAT' overall score, supported by solid revenue growth of 12.41% over the last twelve months.
In light of the divestiture, Integer's fiscal year 2025 projections have been slightly modified to account for the anticipated increase in revenues during the first half of 2024. The updated estimates are the primary reason for the enhancement of the price target.
The analyst's statement provided clarity on the rationale behind the adjustment: "Adjusting our ITGR model to move all FY24 Electrochem revenues to discontinued operations (due to the 9/30/24 divestiture announcement) and reallocating residual revenues to their appropriate business units. FY25 numbers slightly adjusted to reflect the now slightly increased revenues in 1H24. Adjusting our PT to $138 from $135 due to estimate changes."
Based on InvestingPro's analysis, the stock appears to be trading near its Fair Value, with analysts maintaining a strong bullish consensus. For deeper insights, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Integer Holdings has seen several significant developments. Truist Securities has increased the company's price target from $147.00 to $163.00 following the sale of Integer's Electrochem business to Ultralife. The company's third-quarter results showed promising growth with earnings per share exceeding expectations at $1.43, despite a slight shortfall in revenue. Analysts from Piper Sandler and CL King have responded to these results by raising their price targets for Integer Holdings, maintaining an Overweight and Buy rating respectively.
Integer Holdings has also updated its full-year 2024 forecast, now expecting revenues to range between $1,707 million and $1,727 million, indicating a growth of 10% to 11%. This is a slight increase from the previous forecast of 9% to 11% growth. The company's adjusted EBITDA is forecasted between $358 million and $368 million, an 18% to 21% year-over-year rise. Integer Holdings anticipates accelerated organic growth in Q4, particularly in the Cardio & Vascular and Neuromodulation segments.
These recent developments follow the announcement of key leadership changes and the divestiture of the Electrochem business. This sale has led to changes in Integer's financial modeling and has been taken into account in the revised price target from Truist Securities.
The company's earnings and revenue from the first half of 2024 have been reconciled with the company's continuing operations following the sale. Integer Holdings continues to maintain robust fundamentals, including a healthy current ratio of 3.28 and revenue growth of 12.4% in the last twelve months.
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