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Monday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Hologic stock (NASDAQ:HOLX), lowering the price target from $75.00 to $65.00 while maintaining an Outperform rating. According to InvestingPro analysis, Hologic appears undervalued at its current price of $54.16, trading near its 52-week low of $52.12. The company maintains a GOOD financial health score, with strong liquidity evidenced by a current ratio of 3.24. The revision follows Hologic’s second-quarter financial results, which highlighted a $10 million and $0.01 earnings beat, primarily attributed to an unexpected surge in the non-core Skeletal segment. The segment’s actual revenue of $33 million far exceeded the Street’s projection of $17 million. With a P/E ratio of 22.66 and an attractive free cash flow yield of 8%, InvestingPro data reveals 10+ additional key insights about Hologic’s financial position.
Despite the positive performance in the Skeletal segment, Hologic experienced setbacks in other areas, including an $11 million shortfall in Breast Health and an $8 million miss in Molecular Diagnostics. The latter’s weakness was partly due to a reduction in HIV testing in Africa as a result of USAID funding cuts. Additionally, the company’s respiratory segment showed strength but did not fully compensate for the declines elsewhere. For comprehensive analysis of Hologic’s segment performance and future prospects, access the detailed Pro Research Report available exclusively on InvestingPro.
Hologic chose to maintain its full-year revenue guidance range between $4.05 billion and $4.10 billion. However, the adjusted earnings per share (EPS) forecast was revised downward by $0.10 at the midpoint. This adjustment reflects anticipated reduced revenue from China, which was cut by $20 million due to ongoing trade war tensions. Furthermore, the company foresees a $20-25 million impact on the cost of goods sold (COGS) associated with tariffs.
The report from Mizuho indicates that while Hologic is making efforts to regain its growth momentum, the current challenges are likely to continue exerting pressure on the stock. The lowered price target to $65 reflects the updated earnings estimates and the broader market conditions affecting the company’s financial performance.
In other recent news, Hologic Inc . reported second-quarter earnings that surpassed expectations, with adjusted earnings per share at $1.03, slightly above the analyst estimate of $1.02. Revenue for the quarter reached $1.01 billion, slightly exceeding the consensus forecast of $1 billion. Despite these positive results, Hologic has revised its full-year earnings guidance downward, now projecting adjusted EPS between $4.15 and $4.25, compared to the previous forecast of $4.25 to $4.35. The company attributes this adjustment to tariffs and geopolitical conditions, although its revenue outlook remains unchanged.
Jefferies recently adjusted its price target for Hologic shares from $78.00 to $65.00, while maintaining a Hold rating, following the earnings report. The report also highlighted a 3% decline in growth, which was in line with market expectations. The company’s Breast Health segment continued to face challenges, with revenue falling 7.4% to $356.2 million. Looking ahead, Hologic anticipates a 5% increase in organic growth for the fourth quarter, slightly above the 4% prediction by analysts.
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