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Tuesday, Livanova PLC (NASDAQ:LIVN) shares maintained their Equalweight rating by Barclays (LON:BARC) following a recent legal development. Barclays analyst Matt Miksic has upheld the stock’s rating with a price target of $56.00, noting the Italian Supreme Court’s decision regarding the SNIA litigation. The medical technology company, currently trading at $41.42 and maintaining a "GREAT" financial health score according to InvestingPro, appears to be trading below its Fair Value.
The court ruled against Livanova, finding the company liable, but not for the previously anticipated amount of €157 million (~$171 million). The liability has been set at €333 million (~$363 million), which is lower than the former estimate of €454 million (~$500 million). This adjustment is expected to reduce the anticipated earnings per share (EPS) impact, which was previously estimated to be approximately 11 cents per share each quarter. The actual EPS impact is now projected to be at least 2-3 cents less per quarter.
Livanova’s financial position includes $429 million in cash, $295 million in restricted cash, and $225 million in an undrawn revolving credit facility. These resources are available to manage the financial obligations stemming from the court’s decision.
Miksic commented on the ruling’s implications for Livanova’s capital structure and management’s future plans. The resolution of uncertainty is seen as a positive step that allows the company to proceed with a more definitive strategy regarding its finances.
Further details on how Livanova will address the liability and its impact on the company’s financial strategy are expected to be discussed during the first quarter conference call. The company’s approach to debt repayment and other uses of cash will likely be key topics of interest for investors and analysts alike.
In other recent news, Livanova is set to record a $363 million liability in its first-quarter 2025 financials following a ruling by the Italian Supreme Court related to environmental damages tied to its former parent company, SNIA. Despite this, the company has confirmed sufficient resources to cover the liability, with $429 million in cash and $295 million in restricted cash as of the end of 2024. Needham has maintained a Buy rating with a $64 price target, while Goldman Sachs also reiterated a Buy rating but with a $55 target. Mizuho (NYSE:MFG) Securities adjusted its target from $70 to $60, maintaining an Outperform rating after Livanova’s mixed fourth-quarter earnings, which slightly exceeded EPS expectations but missed revenue estimates by $2 million. Wolfe Research downgraded Livanova from Outperform to Peer Perform, citing adjustments for stock-based compensation and litigation financing costs, placing the company’s fair value in the low-$40s to mid-$50s range. These developments highlight Livanova’s ongoing challenges and opportunities, with varying analyst perspectives reflecting different evaluations of the company’s financial health and future prospects.
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