Gold prices bounce off 3-week lows; demand likely longer term
On Monday, Goldman Sachs reiterated a Buy rating with a $55.00 price target on Livanova shares, traded on NASDAQ under the ticker (NASDAQ:LIVN), currently trading at $39.17. The firm’s stance comes after investor meetings in Chicago with Livanova’s CEO Vlad Makatsaria, CFO Alex Shvartsburg, and VP of Investor Relations Briana Gotlin. According to InvestingPro data, the stock is trading near its 52-week low of $38.91, with technical indicators suggesting oversold conditions. These meetings took place following the company’s fourth-quarter results for 2024 and the release of guidance for 2025, during which Livanova’s stock has seen a year-to-date decline of 16%, compared to the Russell 2000’s decrease of 7%. Despite the recent underperformance, InvestingPro analysis indicates the company maintains a GOOD overall financial health score, with liquid assets exceeding short-term obligations and moderate debt levels.
The discussions during the investor meetings centered on Livanova’s core business growth trajectory, development of its product pipeline, opportunities for operating margin expansion, and capital allocation priorities. Despite the stock’s underperformance, Goldman Sachs expressed reinforced confidence in the company’s potential to achieve durable organic growth of 6-7%, with the possibility of exceeding the higher end of this range in 2025.
Goldman Sachs highlighted several factors that could contribute to near-term upside for Livanova, including momentum from new product upgrades such as Essenz, gains in the Oxygenator market, and a rebound in the Neuromodulation business outside the United States. These elements are anticipated to support adjusted earnings per share growth of around 10% over the coming years. With revenue growth of 8.66% in the last twelve months and analyst targets ranging from $53 to $80, InvestingPro research suggests the stock may be undervalued at current levels. For deeper insights into Livanova’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The analyst noted that for Livanova’s stock to gain positive momentum, the company needs to demonstrate ongoing strong performance in its Cardiopulmonary segment, which makes up approximately 55% of sales, and a turnaround in Neuromodulation, accounting for about 45% of sales. Additionally, clarity on the direction of the company’s pipeline and continued investment in Obstructive Sleep Apnea (OSA) and Deep Tissue Dissection (DTD) is crucial. Lastly, progressive earnings beats that not only increase projections for 2025 but also have a positive impact on the outer years are seen as a key driver for the stock’s future growth.
Livanova also expects to provide a more detailed update on outstanding litigation related to SNIA later in the first half of 2025.
In other recent news, Livanova reported its fourth-quarter 2024 earnings, surpassing expectations with an earnings per share (EPS) of $0.81, slightly above the forecast of $0.80. However, the company faced a revenue shortfall, reporting $322 million against an anticipated $323.64 million. Stifel analysts have reduced their price target for Livanova from $72 to $60, maintaining a Buy rating, in light of the company’s mid-single-digit revenue growth and a revenue miss, marking the first since early 2020. Similarly, Mizuho (NYSE:MFG) Securities also adjusted Livanova’s stock target down to $60 from $70, citing mixed earnings results and potential impacts from ongoing litigation in Italy.
Wolfe Research downgraded Livanova’s stock from ’Outperform’ to ’Peer Perform,’ reflecting concerns over the company’s future earnings potential and valuation. This downgrade is based on adjustments for stock-based compensation and litigation financing costs. The firm’s valuation model places Livanova’s fair value in the low-$40s to mid-$50s per share. Livanova’s guidance for 2025 indicates a 6-7% organic revenue growth, with an adjusted EPS forecast between $3.65 and $3.75, suggesting a 9% growth at the midpoint.
The company is also addressing challenges in its Epilepsy business due to service headwinds, while its Cardiopulmonary segment shows strength. Livanova is focusing on expanding its product portfolio with new launches and FDA submissions, particularly in the VNS therapy system and obstructive sleep apnea programs. Investors should note these developments as they assess Livanova’s stock performance and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.