On Monday, Baird upgraded Henry Schein (NASDAQ:HSIC) stock, a provider of healthcare products and services, from Neutral to Outperform, setting a new price target of $92.00, up from the previous $81.00. The firm's decision comes despite slight reductions in top- and bottom-line estimates for the company over the coming quarters.
The upgraded outlook is based on confidence that Henry Schein will not fall below the low end of its earnings per share (EPS) guidance for the current year. Baird anticipates that the company's EPS for 2024 will likely land in the lower half of the projected range. Nonetheless, the firm expects Henry Schein to achieve solid mid to upper-single digit EPS growth in the next year and beyond.
The positive forecast relies on several key factors. Baird believes that Henry Schein's consistent execution, broad diversification, and debt deleveraging will contribute to the company's growth. This outlook suggests a stable financial performance even amid current market conditions.
The analyst from Baird emphasized that the adjustments to Henry Schein's estimates are modest and that the company's diversified approach sets it apart from competitors. It is noted that unlike other companies in the sector, Henry Schein is well-positioned to meet its financial targets.
As Henry Schein heads towards the latter half of the year, Baird's upgraded rating and price target reflect a vote of confidence in the company's strategy and financial health. The firm's analysis indicates that Henry Schein is on track to continue its trajectory of growth, underpinned by strong operational capabilities.
In other recent news, Henry Schein, Inc. faced challenges in the first quarter of 2024, including a cyber incident and lower personal protective equipment sales, but still reported solid earnings. The company's gross margin expansion drove earnings, leading to the affirmation of their 2024 non-GAAP diluted EPS and adjusted EBITDA growth expectations.
Dental specialties and the technology and value-added services business, including the dental software division, showed strong growth, while the medical business saw strong sales of point-of-care diagnostics despite lower PPE sales.
Henry Schein reported a sales growth of 3.7% and repurchased one million shares of common stock. Operating cash flow also significantly increased compared to the prior year. For the full year 2024, the company expects non-GAAP diluted EPS in the range of $5 to $5.16 per share and total sales growth of 8% to 10%.
Looking ahead, the company anticipates stronger growth in the second half of the year, driven by recovery from cyber issues and new product launches. The expansion of its implant portfolio in the US and the international launch of Easy 2.0 are among the planned initiatives. Despite the challenges faced, these are the recent developments at Henry Schein.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.