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On Tuesday, Stifel analysts adjusted their financial outlook for Zimmer Biomet (NYSE:ZBH), lowering the price target to $115.00 from $138.00, while still maintaining a Buy rating on the company’s stock. With the stock currently trading at $90.48, significantly below its 52-week high of $122.25, InvestingPro data indicates the company is trading below its Fair Value. The revision reflects concerns over tariffs and their impact on earnings per share (EPS) for the year 2026. Analysts at Stifel noted that Zimmer Biomet had a strong start to 2025 with first-quarter sales, margins, and EPS exceeding expectations. The company maintains strong fundamentals with a healthy gross profit margin of 71.27% and solid financial health, according to InvestingPro metrics. However, due to the lack of clear guidance regarding the impact of tariffs in 2026, they have reduced their EPS estimates for Zimmer Biomet to $8.00 per share from the previous forecast of $8.70.
The updated EPS estimate takes into account tariff-related headwinds of approximately $0.60 per share, which aligns with the fourth quarter of 2025 tariff-related run-rate, and includes the dilution from the acquisition of Paragon 28, estimated at around $0.10 per share. Despite these challenges, Zimmer Biomet’s management reported on a post-release call that procedure trends remain healthy, and the company’s "Magnificent 7" new product cycle is gaining momentum. Additionally, the integration of the growth-accelerating acquisition of Paragon 28 is progressing well.
The company’s reaffirmed growth and EPS guidance for 2025 was a positive sign, but there was some confusion over second-quarter order delays in the Europe, Middle East, and Africa (EMEA) region, as well as the appropriate tariff run-rate for 2026, which put pressure on Zimmer Biomet’s shares. Management has indicated that they expect between $60 million to $80 million of tariff pressures in the second half of 2025, which has been factored into the reaffirmed EPS outlook for the year. For deeper insights into Zimmer Biomet’s valuation and growth prospects, including 10 exclusive ProTips and comprehensive financial analysis, visit InvestingPro.
In other recent news, Zimmer Biomet reported its first-quarter results for 2025, with revenues reaching $1.909 billion, a 1.1% year-over-year increase, slightly surpassing consensus estimates. The company also reported an adjusted earnings per share (EPS) of $1.81, which exceeded analyst predictions of $1.77. Despite these positive results, Zimmer Biomet revised its full-year 2025 EPS guidance downward to a range of $7.90-$8.10, compared to the earlier projection of $8.15-$8.35. This adjustment accounts for the impact of the Paragon 28 acquisition and anticipated tariffs.
Analysts have responded with mixed adjustments to Zimmer Biomet’s stock price targets. Raymond (NSE:RYMD) James reduced the price target to $104 from $119, maintaining an Outperform rating, while Evercore ISI lowered it to $102 from $116, retaining an In Line rating. BTIG also adjusted its target to $117 from $123, continuing to endorse the stock with a Buy rating. Citi set a new target of $104, down from $118, and maintained a Neutral stance.
The company’s guidance for organic revenue growth in 2025 remains at 3-5%, with reported revenue growth expectations adjusted to 5.7%-8.2%, partly due to favorable foreign exchange conditions. The acquisition of Paragon 28 is expected to bolster Zimmer Biomet’s Surgical, Sports Medicine, Extremities, and Trauma (SET) segment. However, concerns about potential tariffs in 2026 and their impact on future earnings continue to weigh on investor sentiment.
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