Mizuho maintains $58 target on ESTA stock amid trade concerns

On Monday, Mizuho (NYSE:MFG) Securities reiterated its confidence in Establishment Labs Holdings Inc . (NASDAQ: NASDAQ:ESTA), maintaining an Outperform rating and a price target of $58.00. The reaffirmation comes as ESTA stock, currently trading at $32.30, experienced a pre-market dip of 5%. According to InvestingPro data, the stock has declined 20.84% in the past week alone, with a broader 30.13% drop over the last six months. The drop reflects investor apprehension over a potential US-led trade war, which could lead to increased costs of goods sold (COGS) for Motiva products and potentially trigger a recession, further dampening demand in the aesthetics market.

Despite these concerns, Mizuho analysts believe that the market has already factored in expectations of weak demand. While InvestingPro indicates the company maintains a healthy current ratio of 3.56 and impressive gross profit margins of 65.97%, they also suggest that the impact of newly announced US tariffs could ultimately be positive when considering the net relative exposure of US silicone and domicile factors. Moreover, a recent 10% decline in the US dollar against other currencies could prove advantageous for ESTA, given that the company’s currency exposure is un-hedged.

The analysts argue that the significant price correction in the wake of trade war fears presents an appealing buying opportunity, particularly as ESTA prepares to enter the US Motiva cycle. Establishment Labs, known for its Motiva breast implants, is navigating the current economic landscape while analysts monitor the potential impacts of global trade tensions on the company’s operations and financial performance.

Mizuho’s stance reflects a broader analysis of the company’s strategic position and the external financial environment. The firm’s analysts have factored in various economic indicators and currency fluctuations to arrive at their continued support for ESTA’s stock performance.

In the face of market volatility and international trade uncertainties, Mizuho’s maintained rating and price target suggest a belief in the underlying strength and resilience of Establishment Labs’ business model and market position. With analysts forecasting 25% revenue growth for FY2025, the company’s progress and financial health will be closely watched as it contends with the dynamic global economic conditions. For deeper insights into ESTA’s valuation and growth prospects, including 12 additional ProTips and comprehensive financial analysis, explore the full research report available on InvestingPro.

In other recent news, Establishment Labs Holdings Inc. reported its fourth-quarter 2024 earnings, revealing a significant miss on EPS forecasts with an EPS of -$1.19, falling short of the anticipated -$0.64. The company also reported $44.5 million in revenue, slightly below the $44.7 million forecast, despite a 41% year-over-year increase. Mizuho Securities adjusted its price target for Establishment Labs to $58.00 from $70.00 while maintaining an Outperform rating, following the earnings report and positive market reception of the Motiva breast implants in the U.S. TD Cowen analysts also revised their price target to $60 from $75, citing strong early trends of the Motiva implant launch in the U.S., while maintaining a Buy rating.

Furthermore, TD Cowen reaffirmed its Buy rating for Establishment Labs, highlighting the company’s minimal impact from new tariffs due to its strategic positioning. Establishment Labs’ revenue guidance for fiscal year 2025 is set between $205 million and $210 million, slightly surpassing the Street’s estimate, with a focus on achieving positive EBITDA by Q3 2025. The company’s growth prospects are bolstered by the anticipated expansion of Motiva Implant Matrix clinics and procedures, as well as its strategic efforts in emerging markets such as China and Brazil. Despite the lowered price targets from analysts, the firm’s confidence in the company’s long-term growth remains strong.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.