Interactive Brokers shares jump as it secures spot in S&P 500
On Wednesday, Raymond (NSE:RYMD) James analyst Jayson Bedford upgraded shares of ICU Medical (NASDAQ:ICUI) to a Strong Buy from an Outperform rating, despite lowering the price target to $197.00 from $205.00. With the stock currently trading at $138.99, analysts see potential upside of 34%, with targets ranging from $178 to $209. Bedford’s optimism stems from a belief that the current stock price reflects a near worst-case scenario regarding tariff risks. He suggests that there is significant upside potential if tariffs are reduced or not applied at all. According to InvestingPro data, the stock is currently trading near its Fair Value.
Bedford stated that ICU Medical, which specializes in the development, manufacture, and sale of innovative medical devices used in infusion therapy and critical care applications, is poised for strong earnings growth. He anticipates that the company could see over 15% earnings growth over the next two years. This growth expectation is supported by the company’s solid business performance and the introduction of new products. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 2.59, and while currently unprofitable, analysts expect positive earnings this year with an EPS forecast of $6.97 for FY2025.
The analyst pointed out that the stock is trading at approximately 10 times its estimated 2026 EBITDA, which he considers attractive in terms of relative value. Current EV/EBITDA stands at 14.92x, with the company generating $316.92 million in EBITDA over the last twelve months. He also noted that ICU Medical has not kept pace with the broader MedTech market, which further justifies a more favorable stock rating. Get access to more detailed valuation metrics and 12+ additional ProTips with InvestingPro.
Bedford’s evaluation also includes the view that ICU Medical represents a "unique self-help story" within the medical technology sector. This narrative is bolstered by the company’s potential for earnings growth and its relative undervaluation compared to peers.
In summary, the upgrade reflects Raymond James’ confidence in ICU Medical’s fundamentals and the potential for the stock to become more appealing as its fundamentals improve relative to its current valuation. The new price target of $197.00, although slightly reduced, still indicates a positive outlook for the company’s stock performance.
In other recent news, ICU Medical reported impressive financial results for the fourth quarter of 2024, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $2.11, well above the projected $1.49, marking a 41.6% surprise. Revenue also exceeded forecasts, reaching $629.81 million compared to the anticipated $593.86 million. This performance was bolstered by a national shortage in intravenous (IV) solutions, contributing to a 9% year-over-year revenue growth in constant currency terms. Despite these positive results, Needham maintained a Hold rating on ICU Medical, citing the company’s current valuation. The company’s adjusted EBITDA grew by 22% year-over-year, reflecting operational efficiency and strategic growth in key segments. Looking ahead, ICU Medical provided guidance for 2025, with expected revenue and EPS growth, although the mid-point of their EPS forecast slightly trails consensus. The company also projects adjusted EBITDA to range between $395 million and $425 million for 2025.
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