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On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on DENTSPLY SIRONA (NASDAQ:XRAY) shares, reducing the price target from $21.00 to $18.00 while maintaining a Neutral rating. The stock, currently trading at $15.32, has fallen significantly from its 52-week high of $34.28. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics. The revision follows a presentation by the dental and orthodontic products company at an investor conference on Tuesday.
During the conference, management highlighted the progress of their dental and orthodontic products, with particular attention to the new Primescan 2 cloud-based intraoral scanner, which was introduced in the second half of 2024. The company, which generates annual revenue of $3.79 billion with a healthy gross margin of 51.89%, sees this product as crucial for growth. According to Mizuho analyst Steven Valiquette, the success of DENTSPLY SIRONA in 2025 could hinge significantly on the adoption rate of this new scanner. Although the company has shared limited data, they did reveal an increase in scanner placements in 2024 compared to 2023. For deeper insights into DENTSPLY SIRONA’s financial health and growth prospects, InvestingPro subscribers have access to over 10 additional exclusive ProTips and comprehensive analysis.
The company also discussed various factors that could affect the use of Primescan 2, such as the adequacy of Wi-Fi capabilities in dental practices. These details come on the heels of DENTSPLY SIRONA’s fourth-quarter 2024 results and the guidance provided for 2025.
In light of the updates provided by the company and a review of the recent financial results, Mizuho has revised its earnings per share (EPS) estimates. The firm now anticipates a 2025 EPS of $1.80, down from the previous estimate of $1.93, and a 2026 EPS of $2.05, reduced from $2.13. The price target reduction to $18 reflects a lower projected price-to-earnings (P/E) ratio of 9 times, down from 10 times, based on the firm’s 2026 EPS estimates. This adjustment is attributed to an expectation of slower growth for DENTSPLY SIRONA. Despite these challenges, the company maintains a strong dividend track record, having paid dividends for 32 consecutive years, with a current yield of 4.02%. InvestingPro’s comprehensive research report provides detailed analysis of the company’s valuation metrics and growth potential.
In other recent news, DENTSPLY SIRONA reported its fourth-quarter 2024 earnings, showing a slight beat on earnings per share (EPS) but missing revenue forecasts. The company posted an EPS of $0.44, surpassing the forecast of $0.43, while quarterly revenue fell short at $905 million against the expected $922.82 million. UBS analyst Kevin Caliendo maintained a Buy rating on the stock with a price target of $27.00, despite the company’s forecasted high-single-digit percentage organic revenue decline for the first quarter. Needham analysts also lowered their price target for the company to $23.00 from $25.00, while keeping a Buy rating, reflecting reduced earnings estimates. Jefferies analyst Brandon Couillard revised the price target for DENTSPLY SIRONA shares to $17.00 from $20.00, maintaining a Hold rating due to ongoing challenges in the dental industry and specific issues related to Byte. The company is exploring strategic alternatives for its Wellspect Healthcare business, and digital dentistry remains a growth focus. DENTSPLY SIRONA’s management expressed confidence in their strategy for 2025, projecting organic sales decline of 2-4% and an EBITDA margin exceeding 18%.
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