Hologic stock price target cut to $65 by Jefferies

On Friday, Jefferies made an adjustment to the price target for Hologic (NASDAQ:HOLX) shares, reducing it from $78.00 to $65.00, but maintained a Hold rating on the stock. Currently trading at $57.28, near its 52-week low of $55.89, the stock has attracted attention from analysts, with targets ranging from $65 to $90. According to InvestingPro data, 13 analysts have recently revised their earnings expectations downward. The adjustment follows Hologic’s second-quarter earnings report, which showed a 3% decline in growth, aligning with market expectations, and an earnings per share (EPS) that was slightly above forecasts by 1%, supported by tax benefits and stock buybacks. Despite market challenges, InvestingPro analysis shows Hologic maintains a strong financial health score of 3.07 (rated as "GREAT"), with liquid assets exceeding short-term obligations.

The company’s revenue guidance for 2025 remains unchanged, although the forecast for organic growth was reduced by 50 basis points, reflecting the impact of challenges in the Chinese market. The focus for investors and analysts now shifts to the fourth-quarter performance, where a 5% increase in organic growth is anticipated, slightly higher than the 4% predicted by the Street.

The soft performance in the Breast Health segment continues to be a concern, and the company has adjusted its EPS projections for 2025 downward by $0.10, attributing this change to the effect of tariffs.

Jefferies’ analyst commented on the earnings, noting the alignment with expectations and the factors influencing the company’s financial outlook. The revised price target reflects these considerations, while the Hold rating suggests a neutral stance on the stock’s potential performance. Trading at a P/E ratio of 18.03 with a strong free cash flow yield of 9%, the stock appears undervalued according to InvestingPro’s Fair Value analysis. Discover more insights and 8 additional ProTips with an InvestingPro subscription, including detailed valuation metrics and comprehensive financial health analysis.

In other recent news, Hologic Inc . reported second-quarter results that surpassed expectations, with adjusted earnings per share reaching $1.03, slightly above the analyst estimate of $1.02. Revenue for the quarter was $1.01 billion, just above the consensus forecast of $1 billion. Despite this performance, Hologic has revised its full-year earnings guidance downward, now expecting adjusted EPS of $4.15 to $4.25, compared to the previous forecast of $4.25 to $4.35, which was below analyst expectations of $4.26. The company’s revenue outlook remains unchanged, although the CFO cited tariffs and geopolitical conditions as factors for the reduced earnings guidance. In the diagnostics segment, revenue increased by 0.8% to $453.6 million, while the breast health segment saw a decline of 7.4% to $356.2 million. Surgical revenue grew by 4.2% to $162.5 million. For the third quarter, Hologic forecasts adjusted EPS of $1.04 to $1.07 on revenue of $1 billion to $1.01 billion, which is below what analysts had estimated. The company’s leadership highlighted strong profitability and successful share buybacks as positive factors in their financial results.

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