Allen Lutz, an analyst from Bank of America Securities, reiterated the Sell rating on Owens & Minor (OMI – Research Report). The associated price target is $16.00.
Allen Lutz provided a Sell rating for Owens & Minor’s stock, primarily due to concerns about the company’s short-term outlook and anticipated performance into 2024. Despite a strong third quarter, the fourth quarter appears challenging, with a steep ramp-up required to meet the midpoint of guidance. This includes a 55% quarter-on-quarter and a 140% year-on-year increase in adjusted EPS. Lutz also noted that while there are signs of improvement in PPE visibility, it remains limited in the near term.
Additionally, the initial FY24 outlook for low double-digit EBITDA/EPS growth is below consensus. While the company’s long-term performance largely hinges on its ability to sell higher-margin PPE products, Lutz remains cautious, awaiting better visibility into PPE. There are also concerns about how the company can handle recent operational challenges, such as growing the distribution customer base, cross-selling private label, and integrating Apria within the Patient Direct business. Thus, Lutz maintains an Underperform rating and a $16 price objective, implying a ~6x FY24 EV/EBITDA multiple.
According to TipRanks, Lutz is a 2-star analyst with an average return of -0.7% and a 60.87% success rate. Lutz covers the Healthcare sector, focusing on stocks such as Teladoc, CVS Health, and Omnicell.
See the top stocks recommended by analysts >>
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Owens & Minor (OMI) Company Description:
Owens & Minor, Inc. is a global healthcare solutions company. It integrates technologies, products, and services aligned to deliver significant and sustained value for healthcare providers and manufacturers across the continuum of care. The firm has distribution, production, customer service and sales facilities located across the Asia Pacific region, Europe, Latin America, and North America. The company was founded by Otho O. Owens and G. Gilmer Minor in 1882 and is headquartered in Mechanicsville, VA.
Read More on OMI:
