In a report released yesterday, Caitlin Cronin from Canaccord Genuity maintained a Hold rating on Zimmer Biomet Holdings (ZBH – Research Report), with a price target of $115.00.
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Caitlin Cronin has given her Hold rating due to a combination of factors surrounding Zimmer Biomet Holdings’ recent acquisition of Paragon 28. The acquisition is seen as a strategic move to enhance Zimmer Biomet’s presence in the foot and ankle segment, an area where the company previously lacked a direct commercial channel. The deal is expected to be immediately accretive to growth and gross margins, although it may initially dilute adjusted EPS in the short term.
Despite the potential for cross-selling opportunities and the retention of Paragon 28’s commercial and R&D teams, there are execution risks related to cultural, operational, and retention challenges. While the acquisition offers growth potential, the conservative guidance for FY25 suggests that the company is cautious about immediate gains. Therefore, the Hold rating reflects the need for more clarity on execution and performance improvements before a more favorable recommendation can be made.
Cronin covers the Healthcare sector, focusing on stocks such as Zimmer Biomet Holdings, AxoGen, and Vericel. According to TipRanks, Cronin has an average return of -3.7% and a 34.57% success rate on recommended stocks.