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Investing.com - Baird has reiterated an Outperform rating on Owens & Minor (NYSE:OMI) stock with a price target of $10.00, highlighting several potential catalysts for the healthcare solutions company.
The research firm believes OMI could benefit from significant cash tax advantages through the Ownership by Businesses and Beneficial Buyers Act (OBBBA), while suggesting that investor concerns over a suspected Kaiser contract loss may be exaggerated.
Baird also points to a potential sale of OMI’s Patient Health Solutions (PHS) division as a possibly accretive move for the company, while noting that the core Patient Direct business continues to demonstrate strength.
The firm’s positive outlook comes despite OMI shares having declined 52% year-to-date, significantly underperforming compared to the S&P 500’s 7.8% gain during the same period.
With the stock trading at what Baird describes as "historic lows" in terms of valuation, the firm expresses confidence that OMI offers upside potential even without the materialization of the identified catalysts.
In other recent news, Owens & Minor Inc . reported its first-quarter 2025 financial results, surpassing earnings expectations with an earnings per share (EPS) of $0.23, compared to the forecast of $0.20. However, the company’s revenues were slightly below expectations, coming in at $2.63 billion against the anticipated $2.66 billion. Additionally, Owens & Minor announced the termination of its planned acquisition of Rotech Healthcare Holdings Inc., citing regulatory challenges as the primary reason. The company paid an $80 million termination fee to Rotech Healthcare and will redeem $1 billion of notes issued in April 2025 as part of unwinding the deal. Despite this setback, Owens & Minor’s CEO, Edward A. Pesicka, remains confident in the company’s strategy, emphasizing a focus on growing their Patient Direct business and improving cash flow for deleveraging. Furthermore, at the company’s 2025 Annual Meeting of Shareholders, all nine directors up for election received substantial majority support, highlighting strong shareholder engagement. These developments reflect significant recent activities for Owens & Minor, impacting both its financial and strategic directions.
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