Wolfe starts Zimmer Biomet at Peer Perform, sees $115-$130 fair value

As previously reported, Wolfe Research initiated coverage of Zimmer Biomet (ZBH) with a Peer Perform rating and no price target. The firm sees Zimmer Biomet as having the number two orthopedics portfolio globally, but add that as the “clear global number one in hips and knees,” incremental market share gains in recent years have been “challenging.” Zimmer Biomet is an orthopedic “pure play” and a clear leader in field, but the competition includes Stryker (SYK) and Johnson & Johnson (JNJ), both of whom sell scaled portfolios beyond orthopedics, notes the analyst, who adds that “this relatively ‘narrow’ orientation versus two competitors with ‘broader’ bags is a structural consideration” when thinking about the share gain opportunity from this already-high base. The firm set a $115-$130 fair value range for Zimmer Biomet shares.