Rothschild Redburn initiates Zimmer Biomet stock with Buy rating on growth outlook

Investing.com - Rothschild Redburn initiated coverage on Zimmer Biomet (NYSE:ZBH) with a Buy rating and a price target of $130.00 on Thursday. According to InvestingPro data, the stock is currently trading below its Fair Value, with a solid financial health score of 2.9/5 labeled as "GOOD."

The research firm cited Zimmer Biomet’s positioning to reaccelerate organic growth and stem historical share losses in the orthopedic market, where it remains the global leader in knee and hip reconstruction. The company maintains strong fundamentals with a 71.25% gross profit margin and has demonstrated consistent performance with 14 consecutive years of dividend payments.

Rothschild Redburn highlighted the company’s refreshed portfolio in core joint reconstruction and increased exposure to higher-growth adjacencies such as lower extremities, which should drive improved mid-term growth and margins.

The firm expressed confidence in Zimmer’s "Magnificent Seven" product launches, including the Persona OsseoTi cementless total knee system and the Oxford Partial Cementless knee, which it described as "best-in-class."

Rothschild Redburn also noted potential for accelerated adoption of Zimmer’s ROSA robotic assistance platform following the OsseoTi rollout, adding that the stock has rerating potential given its current valuation discount relative to the sector and orthopedic peers.

In other recent news, Zimmer Biomet reported second-quarter earnings that surpassed analyst expectations. The company’s revenue grew by 3% year-over-year on an organic and currency-neutral basis, exceeding consensus estimates by approximately 1%. This strong performance was driven by its U.S. hip and knee portfolios, as well as its global S.E.T. business. Following these results, Zimmer Biomet raised its full-year earnings guidance, signaling confidence in its continued growth. JMP Securities maintained a Market Outperform rating for Zimmer Biomet, with a price target of $125.00, highlighting the company’s robust second-quarter performance. Meanwhile, Bernstein SocGen Group raised its price target for Zimmer Biomet to $105.00 from $100.00, citing an improved outlook and a higher price-to-earnings multiple. Despite these positive developments, Bernstein maintained a Market Perform rating on the stock. These updates reflect the company’s recent progress and the positive assessments from analyst firms.

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