Bubble or no bubble, this is the best stock for AI exposure: analyst
Investing.com - BTIG upgraded Solventum (NYSE:SOLV) from Neutral to Buy on Tuesday, setting a price target of $100.00 as the healthcare spin-out shows signs of stronger execution heading into 2026. Currently trading at $85.56 with a market cap of $14.84 billion, Solventum has been gaining momentum.
The research firm noted that Solventum has overcome initial challenges faster than expected, having previously been one of the worst-performing healthcare spin-outs due to unclear long-range targets and debt concerns.
BTIG highlighted the company’s divestiture of its Purification & Filtration business to Thermo Fisher Scientific as a key factor in reducing debt, while consistent execution against guidance has improved investor confidence.
The upgrade reflects BTIG’s positive outlook on Solventum’s improving top-line growth, both organically and through recent acquisitions, with margins expected to increase as more post-spin activities are completed. InvestingPro data shows 6 analysts have recently revised their earnings upwards for the upcoming period, supporting this positive outlook.
The $100 price target represents a 14.5x multiple on BTIG’s 12-24 month earnings per share estimate, which the firm notes is only 0.5x-1.0x higher than current valuation and still maintains a meaningful discount to peers that trade closer to 20x on average. With a current P/E ratio of 8.47, Solventum appears slightly overvalued according to InvestingPro’s Fair Value assessment.
In other recent news, Solventum Corp announced its third-quarter 2025 earnings, reporting an earnings per share (EPS) of $1.50, which was below the projected $1.77. The company’s revenue, however, met expectations at $2.1 billion. Additionally, Solventum revealed plans to acquire Acera Surgical, a bioscience firm specializing in regenerative wound care, for $725 million in cash with potential additional payments of up to $125 million based on future milestones. This acquisition is anticipated to enhance Solventum’s portfolio in the U.S. acute care market. In a related development, Solventum’s board approved a $1 billion share repurchase program, set to commence in 2026. UBS has maintained its Neutral rating for Solventum, with a price target of $79.00, following discussions about these strategic moves. The acquisition of Acera is expected to initially dilute earnings per share in 2026 but become beneficial by 2027. These developments mark significant steps for Solventum in expanding its market presence and returning value to shareholders.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.