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On Monday, Stifel analysts maintained a Hold rating on Avanos Medical (NYSE:AVNS) shares, with a set price target of $17.00. The stock, currently trading at $12.43 and near its 52-week low of $11.90, has seen a challenging period with a 45.65% decline over the past six months. According to InvestingPro analysis, the company appears undervalued based on its comprehensive Fair Value model.
Avanos Medical, a company specializing in medical devices and technologies with annual revenue of $687.8 million, is undergoing a period of transition that includes the appointment of new leadership and the search for a permanent Chief Financial Officer (CFO). Analysts at Stifel have expressed that until Avanos Medical demonstrates a clear strategic direction and consistent operational performance, they will not be altering their current rating. InvestingPro subscribers can access 10+ additional insights about the company’s financial health and future prospects through the comprehensive Pro Research Report.
The analysts have acknowledged that Avanos Medical’s stock is attractively priced based on current financial metrics, trading at just 0.69 times book value with a healthy current ratio of 2.37. While the company wasn’t profitable in the last twelve months, InvestingPro data shows analysts expect profitability this year, with a strong free cash flow yield supporting the investment case. However, they emphasize the need for the company to exhibit signs of consistent execution and positive fundamental improvement before considering a change in their recommendation.
The report suggests that investors are looking for more concrete evidence of the company’s ability to execute its strategies successfully. This includes the impact of the new leadership’s decisions and the integration of a permanent CFO, which are expected to be key drivers in the company’s journey towards long-term transformational change.
In summary, while Avanos Medical’s stock may seem undervalued, Stifel analysts are taking a cautious approach. They are looking for more evident progress in the company’s performance and strategic initiatives before reassessing their position on the stock.
In other recent news, Avanos Medical reported financial results for the fourth quarter of 2024, surpassing expectations with an earnings per share (EPS) of $0.43, above the forecasted $0.40. The company’s revenue also exceeded projections, reaching $179.6 million compared to the anticipated $177.23 million. Avanos has also completed the sale of its Respiratory Health business, marking a significant step in its ongoing transformation efforts. Additionally, Avanos announced leadership changes, with David Pacitti appointed as the new CEO, effective April 14, 2025. Pacitti brings extensive experience from his previous role at Siemens (ETR:SIEGn) Healthineers. Furthermore, Avanos has seen executive transitions, including the departure of Interim CEO Michael C. Greiner, who will receive a severance package under the company’s Severance Pay Plan. Analyst firms have not reported any recent upgrades or downgrades for Avanos Medical. The company aims to achieve long-term gross margins of over 60% and is targeting 2025 net sales between $665 million and $685 million.
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