DENTSPLY SIRONA: Strong Growth and Efficiency Gains Signal Outperform Rating

DENTSPLY SIRONA (XRAY – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Michael Petusky from Barrington maintained a Buy rating on the stock and has a $41.00 price target.

Michael Petusky’s rating is based on a detailed analysis of DENTSPLY SIRONA’s financial outlook and strategic initiatives. He projects a slight revenue decline in Q1/24 but anticipates top-line growth in segments like orthodontics and implants, as well as the Wellspect business. Despite traditionally weaker first and third quarters for the company, Petusky expects modest revenue growth in specific areas. Additionally, he foresees a minor decrease in gross margin for Q1 but predicts material improvement in the subsequent quarters, extending into 2025 and 2026. Operating expenses as a percentage of revenue are also expected to improve, indicating efficiency gains and cost control in the company’s operations.
Furthermore, Petusky anticipates an increase in adjusted EPS and adjusted EBITDA in Q1/24 compared to the previous year, suggesting a resilient financial performance. He underscores management’s long-term financial targets, which are considered achievable through internal initiatives such as SKU rationalization and footprint reduction. Petusky believes that the realization of FY/26 targets will significantly enhance the stock’s performance. His OUTPERFORM rating and $41 price target are supported by these fundamentals, combined with a favorable risk/reward ratio for investors at the current share price level, reinforcing his confidence in the company’s potential for substantial growth.

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DENTSPLY SIRONA (XRAY) Company Description:

DENTSPLY SIRONA, Inc. engages in the design, manufacture, sales, and distribution of professional dental products and technologies. It operates through the Technologies and Equipment, and Consumables segments. The Technologies and Equipment segments comprises dental technology, equipment, and healthcare consumable products such as dental implants, laboratory dental products, computer-aided design and computer-aided manufacturing systems, imaging systems, treatment centers, and consumable medical device products. The Consumables segment offers preventive, restorative, instruments, endodontic, and orthodontic dental products. The company was founded in 2016 and is headquartered in York, PA.