Goldman Sachs downgrades Livanova stock to Neutral on slowing growth outlook

Investing.com - Goldman Sachs downgraded Livanova (NASDAQ:LIVN) from Buy to Neutral on Wednesday, while slightly reducing its price target to $55.00 from $56.00. According to InvestingPro analysis, the stock currently appears undervalued, with analyst targets ranging from $56 to $80.

The downgrade follows Livanova stock’s 12.3% year-to-date appreciation through September 30, 2025, outperforming the Russell 2000 index’s 9.2% gain during the same period. InvestingPro data shows an even more impressive 34.2% gain over the past six months, with the company maintaining a GREAT financial health score.

Goldman Sachs indicated that consensus numbers now more appropriately reflect Livanova’s forward outlook, despite the company’s valuation remaining "undemanding." While the company wasn’t profitable in the last twelve months, InvestingPro analysis shows six analysts have recently revised their earnings estimates upward, with expectations of profitability this year.

The investment bank cited the maturing Essenz product cycle as a key factor in its rating change, noting the product is expected to account for approximately 72% of heart-lung machine (HLM) sales in 2025 and about 87% in 2026.

Goldman Sachs analysts believe the transition from the S5 to Essenz platform will lead to "decelerating top-line growth and a slowing rate of margin expansion," which they expect will "limit the potential for P/E multiple expansion" for Livanova shares.

In other recent news, LivaNova PLC reported impressive second-quarter results for 2025, with earnings per share (EPS) reaching $1.05, surpassing analyst expectations of $0.87 by 20.69%. The company’s revenue also exceeded forecasts, coming in at $353 million compared to the anticipated $332.21 million. Additionally, Barclays has raised its price target for LivaNova from $55 to $58, maintaining an Equalweight rating on the stock. This adjustment reflects the firm’s increased sales projections by approximately 3% for 2025 and 9% on average per year for 2026 and beyond.

Furthermore, LivaNova announced the appointment of Donald Zurbay to its board of directors and as a member of the Audit and Compliance Committee. Zurbay brings a wealth of experience, having served as President and CEO of Patterson Companies, Inc., and previously as its CFO. His extensive background in finance, accounting, and strategy is expected to benefit LivaNova’s governance. These developments mark significant milestones for the company as it continues to navigate its growth trajectory.

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