On Wednesday, Stifel analysts increased their price target for Zimmer Biomet Holdings Inc (NYSE:ZBH) shares from $130.00 to $138.00, while reiterating a Buy rating on the stock. The firm expressed confidence in the company's prospects for the year, citing several positive factors that could bolster its performance. InvestingPro analysis indicates the stock is currently undervalued, with analyst targets ranging from $105 to $150.
Zimmer Biomet, a medical device company specializing in musculoskeletal healthcare with a market capitalization of $21.8 billion, has been trading near 10-year valuation lows. Stifel analysts believe that the fundamentals for Zimmer Biomet are set to improve significantly in 2025. The company, which maintains an impressive 71.9% gross profit margin and generates $7.6 billion in annual revenue, is in the process of launching six major products, expected to have an increasingly visible impact as the year progresses. Additionally, the company has stated that issues with enterprise resource planning (ERP) are now "fully resolved," and comparisons with previous years are anticipated to be more normal.
The management team at Zimmer Biomet has publicly committed to achieving performance targets for 2025, with expectations to meet or even exceed these goals. In light of this optimism regarding the company's fundamentals for the year ahead, Stifel has adjusted their target price accordingly. InvestingPro data reveals several positive indicators, including low price volatility and consistent dividend payments for 13 consecutive years. Subscribers can access additional insights and detailed analysis through InvestingPro's comprehensive research reports.
Supporting this positive long-term outlook for Zimmer Biomet, Stifel analysts also referenced a recent in-depth conversation with a key opinion leader (KOL) in orthopedics. The KOL, a member of the design team and an early adopter of Zimmer Biomet's ROSA Shoulder robotic application, has successfully completed 40 cases using the technology. The surgeon emphasized a strong preference for using the ROSA Shoulder system for as many patients as possible, indicating a promising adoption rate within the medical community.
Zimmer Biomet's stock price target adjustment reflects Stifel's belief in the company's potential for growth and success in the coming year, backed by product launches, resolved operational issues, and positive feedback from medical professionals in the field.
In other recent news, Zimmer Biomet has made several notable strides in its operations. The company declared a quarterly cash dividend for Q4 2024, maintaining a 13-year track record of consistent dividend payments. Q3 reports showed a 4% increase in net sales, totaling $1.824 billion, and an earnings per share of $1.74. Zimmer Biomet also repurchased approximately $600 million in shares during the same quarter.
JPMorgan (NYSE:JPM) upgraded Zimmer Biomet's stock from Neutral to Overweight, foreseeing potential for the company's earnings multiple to expand. Truist Securities, while maintaining a Hold rating due to persistent ERP issues, increased its price target from $112.00 to $117.00. Oppenheimer retained an Outperform rating, expressing confidence in the company's resilience and growth potential.
Zimmer Biomet also gained FDA approval for its Oxford Cementless Partial Knee system, making it the only FDA-approved cementless partial knee implant in the U.S. The company plans a nationwide launch of this product in the first quarter of 2025. These are among the recent developments in Zimmer Biomet's performance and strategy.
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