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On Wednesday, Raymond (NSE:RYMD) James reaffirmed confidence in Merit Medical Systems , Inc. (NASDAQ:MMSI), raising the price target on the company’s stock to $116 from $110, while maintaining an Outperform rating. The firm’s analysts highlighted the company’s fourth-quarter gross margin, which they noted as the highest ever for Merit Medical (TASE:BLWV), improving approximately 300 basis points year-over-year. The company, currently valued at approximately $6 billion, maintains a strong financial position with an "GREAT" overall health score according to InvestingPro analysis.
The analysts pointed out that, in the context of Merit Medical’s 2025 operating margin guidance, which anticipates an annual increase of 40-80 basis points, there appears to be potential for the company to outperform its own forecasts. Despite the earnings per share (EPS) guidance for the upcoming period falling slightly below consensus expectations—by $0.10 or 3%—analysts at Raymond James believe the negative sentiment this may cause among investors is likely to be temporary. This outlook is supported by InvestingPro data showing three analysts have recently revised their earnings estimates upward, with the company maintaining a healthy gross profit margin of 46.8%.
Merit Medical is well-positioned, according to Raymond James, to exceed its guidance and sustain a revenue growth rate of 5-7% and an EPS increase of more than 10%. The company has demonstrated a consistent performance in the past, with organic revenue growth and adjusted EPS growth averaging 6% and 19%, respectively, over the last five years.
The analysts’ outlook for Merit Medical is based on the company’s solid historical growth and the recent gross margin achievement, which they suggest indicates a strong operational foundation that can support continued growth and profitability. The raised price target reflects Raymond James’s expectation that Merit Medical will continue to exceed its financial objectives and deliver value to its shareholders.
In other recent news, Merit Medical Systems Inc. reported strong financial results for the fourth quarter of 2024, with earnings per share (EPS) of $0.93, surpassing the forecast of $0.82. The company’s revenue for the quarter reached $355.2 million, exceeding the expected $346.76 million, marking a 9% year-over-year increase. This robust performance was complemented by a 30% growth in non-GAAP operating profit and an improvement in operating margin by 305 basis points to 19.6%. Merit Medical has provided optimistic guidance for 2025, projecting revenue growth between 8% and 10%, and non-GAAP EPS in the range of $3.58 to $3.70. The company anticipates operating margins to be between 19.4% and 19.7%. Additionally, Merit Medical has been focusing on strategic acquisitions, including the integration of assets from Endogastric Solutions and Cook Medical, which are expected to contribute significantly to their growth. Analysts from firms such as Wells Fargo (NYSE:WFC) and Piper Sandler have shown interest in the company’s future guidance and strategic initiatives. Despite the positive earnings, some challenges such as supply chain issues and tariff uncertainties remain areas to watch.
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