Needham cuts DENTSPLY stock target to $23, keeps buy rating

On Thursday, Needham analysts revised their price target for DENTSPLY SIRONA (NASDAQ: NASDAQ:XRAY) shares, reducing it to $23.00 from the previous $25.00, while still recommending a Buy rating on the stock. Currently trading at $17.39, near its 52-week low of $17.21, InvestingPro analysis suggests the stock is undervalued. The adjustment follows DENTSPLY SIRONA’s fourth-quarter 2024 performance, which fell short of market expectations, and the company’s financial outlook for 2025 that presented a mixed picture compared to analysts’ projections.

The company’s Implants and Byte products adversely affected its Imaging Systems and Treatment Centers (IOS) segment, while the Equipment/Disposables and Services (EDS) segment experienced a decline attributed to the timing of orders. Despite recent challenges, InvestingPro data shows the company maintains a solid 52% gross profit margin and offers a 3.4% dividend yield, having maintained dividend payments for 31 consecutive years. Contrary to trends, the Clinical and Consumable Supplies (CTS (NYSE:CTS)) segment saw equipment sales increase, although CAD/CAM sales dipped.

For the year ahead, the analysts noted potential areas for positive performance. The management of DENTSPLY SIRONA has expressed a high level of confidence in their guidance for 2025. This optimism is supported by InvestingPro data, which reveals strong free cash flow yield and analysts’ expectations of profitability in the coming year. Despite these optimistic elements, Needham has lowered its price target to reflect reduced earnings estimates.

The reduction in the price target to $23 from $25 is a response to the company’s latest financial data and the analysts’ recalibrated expectations. DENTSPLY SIRONA’s management remains confident in their strategy, suggesting that they anticipate a strong guide for the coming year despite the recent adjustments. For deeper insights into DENTSPLY SIRONA’s valuation and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro, which includes additional financial metrics and expert analysis.

In other recent news, Dentsply Sirona Inc. reported its fourth-quarter 2024 earnings, showing a slight beat on earnings per share (EPS) but a miss on revenue forecasts. The company achieved an EPS of $0.44, surpassing the forecast of $0.43, while revenue fell short at $905 million against the expected $922.82 million. This revenue miss highlights ongoing challenges in the dental market and macroeconomic pressures. Additionally, the company is exploring strategic alternatives for its Wellspect Healthcare business, which could lead to operational shifts. The company has been focusing on digital dentistry as a growth area, with new product launches and increased user engagement. Analysts from Evercore ISI and Morgan Stanley (NYSE:MS) have been closely monitoring these developments, indicating potential impacts on the company’s future performance. For 2025, Dentsply Sirona projects an organic sales decline of 2-4% with an EBITDA margin exceeding 18%, while also expecting adjusted EPS between $1.80 and $2.00.

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