Henry Schein (HSIC – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Allen Lutz from Bank of America Securities reiterated a Sell rating on the stock and has a $69.00 price target.
Allen Lutz has given his Sell rating due to a combination of factors including the weaker end market demand and the impact of a cybersecurity incident on Henry Schein’s performance. The company’s North American consumables segment saw a significant decline, attributed in part to the cyber event, which continues to exert a considerable negative influence. Despite some improvements in product mix and gross margins, the overall guidance suggests a need for a substantial increase in organic revenue growth in the second half of the year, presenting a challenging scenario given the number of uncertainties and execution risks involved.
Furthermore, Lutz acknowledges Henry Schein’s strong positioning in higher-growth markets and the potential for new product launches to support growth. However, he remains cautious due to the need for a successful execution through the fiscal year, particularly in the latter half, and the pressure from multiple factors such as M&A-driven growth, recovery from the cybersecurity incident, and the required ramp-up for FY24. The price objective has been adjusted to reflect peer group multiple compression, reinforcing the Sell rating in light of these considerations.
Based on the recent corporate insider activity of 52 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of HSIC in relation to earlier this year.
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Henry Schein (HSIC) Company Description:
Henry Schein, Inc. engages in the provision of health care products and services to medical, dental, and veterinary office-based practitioners. It operates through the Healthcare Distribution, and Technology and Value-Added Services segments. The Healthcare Distribution segment includes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. The Technology & Value-Added Services segment offers financial services on a non-recourse basis, e-services practice, technology, network and hardware services. The company was founded by Henry Schein and Esther Schein in 1932 and is headquartered in Melville, NY.
