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On Thursday, Morgan Stanley (NYSE:MS) analyst Robert Davies revised the firm’s stance on Straumann Holding AG (SIX:STMN:SW) (OTC: SAUHF), shifting from an Underweight to an Equalweight rating. Accompanying this upgrade was an increase in the price target, set now at CHF130.00, up from the previous CHF115.00. The adjustment follows the company’s fourth-quarter results for the year 2024.
Davies noted that the decision to upgrade Straumann’s rating came after a two-year period of maintaining an Underweight rating. The change reflects a reassessment of several key factors that initially shaped Morgan Stanley’s cautious view. These included concerns about Straumann’s stock performance relative to leading indicators such as consumer confidence and the US ISM, signs of weakening demand in dental implant markets, and perceived misalignment between the company’s valuation and interest rates.
Additionally, Davies pointed out that Straumann’s ambitious group targets for 2030 had previously seemed too optimistic, with Morgan Stanley’s estimates being 10% below the consensus. There were also reservations about the company’s EBIT forecasts for 2024 and 2025, which were slightly below consensus due to foreign exchange headwinds impacting margin progression.
The analyst’s commentary highlighted a neutral sector view on European Medtech for the year 2024, based on anticipated risks to valuation and earnings. In such an environment, consumer-exposed sectors like Dental were expected to face challenges in outperforming the market.
Straumann’s recent performance and updated outlook have led to a reassessment by Morgan Stanley, culminating in the revised rating and price target. The upgrade to Equalweight indicates a neutral position on the stock, suggesting that the analyst now views Straumann’s prospects as more in line with the broader market expectations.
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