Bernstein upgrades Sonova stock to Outperform on market recovery

Investing.com - Bernstein SocGen Group has upgraded Sonova Holding AG (SWX:SOON) (OTC:SONVY) from Market Perform to Outperform, while raising its price target to CHF278.00 from CHF270.00. According to InvestingPro analysis, the stock is currently trading near its 52-week low with technical indicators suggesting oversold conditions.

The upgrade comes as Sonova shares have declined 18% since mid-May, with valuation dropping from 25 times 2025/26 earnings per share to 21 times, despite improving fundamental drivers in the hearing aid market. The company maintains robust financials with a 72.43% gross margin and 6.58% revenue growth over the last twelve months. Get more detailed insights and Fair Value estimates with InvestingPro, which features 6 additional key tips for this stock.

The U.S. private hearing aid market has shown signs of recovery, rebounding to low single-digit growth in the second quarter after declining mid-single digits in the first quarter. European markets including Germany and France also demonstrated stronger unit growth in Q2.

Bernstein expects Sonova’s fiscal year through March could experience more normal hearing aid market growth of 4-6%, particularly as Q4 faces easier year-over-year comparisons.

Additional positive factors include Veterans Affairs pricing increasing 26% versus expectations of 10%, which Bernstein estimates will boost wholesale organic growth by 2.6% and EBITA growth by 5.7%, while Sonova has confirmed its return to Costco (NASDAQ:COST) distribution channels. Investors should note that Sonova’s next earnings report is scheduled for August 19, 2025.

In other recent news, Sonova Holding AG has seen mixed analyst opinions. Barclays (LON:BARC) downgraded Sonova from Equalweight to Underweight, citing a challenging and competitive market environment for the hearing aid manufacturer. Barclays also reduced its price target for Sonova to CHF225.00 from CHF275.00 and lowered its earnings estimates by 1.5% to 5%. The firm expressed concerns about downside risks and noted that Sonova’s valuation remains elevated despite these issues. Conversely, HSBC upgraded Sonova from Hold to Buy, though it cut the price target from CHF310.00 to CHF290.00. HSBC’s analyst, Shubhangi Gupta, highlighted Sonova’s strong balance sheet and product differentiation as attractive features, despite a slowdown in U.S. commercial markets and potential tariff risks. Gupta suggested that concerns about U.S. tariffs might be overstated, considering the Nairobi protocol’s impact on hearing aid products. These developments reflect varied perspectives on Sonova’s financial health and market position.

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