Kevin Caliendo, an analyst from UBS, has initiated a new Hold rating on Solventum Corporation (SOLV).
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Kevin Caliendo has given his Hold rating due to a combination of factors that suggest Solventum Corporation’s stock is appropriately valued at present. The company’s portfolio and market positioning do not fully reflect a return to organic growth at market levels or their long-range plan margin target by 2028. While there is an opportunity for portfolio expansion in key growth areas due to recent de-levering, there are no evident gaps that would close the growth gap by 2028.
Additionally, while Solventum has shown impressive topline performance, particularly in the MedSurg sector, there are challenges ahead such as SKU rationalization and tougher comparisons that may moderate growth in the near term. The potential for outperformance exists primarily through inorganic growth and new product offerings, along with gross margin enhancements that could drive higher growth and multiple expansion. However, the discrete supply chain opportunities have not been quantified sufficiently to forecast significant margin enhancement annually. Therefore, the stock is considered to be trading at a reasonable level compared to similar companies.
According to TipRanks, Caliendo is a 3-star analyst with an average return of 4.2% and a 55.10% success rate. Caliendo covers the Healthcare sector, focusing on stocks such as CVS Health, Premier, and Quest Diagnostics.
In another report released on September 25, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $78.00 price target.