On Wednesday, CFRA updated its price target on Sonova Holding AG (SOON:SW) (OTC: OTC:SONVY), a leader in the hearing care solutions sector, lifting it to CHF290 from the previous CHF260. The firm retained a Hold rating on the stock. The revision reflects Sonova's anticipated financial performance, with the company's higher margin and lower leverage contributing to a price-to-earnings (P/E) ratio forecast of 26x for the fiscal year ending in March 2025, surpassing the peer average of 22x.
Sonova's financial results showed a mixed picture, with sales and adjusted EBITA (earnings before interest, taxes, and amortization) increasing by 3.2% and 4.4% respectively, on a constant currency basis. This growth was particularly noted in the second half of the year, which helped offset a weaker first half. However, the strong currency environment presented challenges, resulting in a 9.6% decrease in adjusted earnings per share (EPS) to CHF10.06, which was marginally below the forecast of CHF10.30.
Looking forward, Sonova is counting on its new product launches to bolster its performance in FY25. The company has provided guidance for sales growth between 6%-9% and adjusted EBITA growth of 7%-11%, both measured at constant currency. Moreover, the currency impact, which previously posed a headwind, is anticipated to become favorable in the future.
In light of this guidance, CFRA has adjusted its FY25 EPS estimate for Sonova to CHF11.17, down from CHF11.75, and introduced an FY26 estimate of CHF12.65. The firm anticipates that Sonova will experience a positive sales growth trajectory in FY25, supported by a broader market recovery consistent with industry peers.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.