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On Tuesday, UBS reiterated a Sell rating on Zimmer Biomet (NYSE:ZBH) shares with a steady price target of $105.00. The firm’s analyst Danielle Antalffy noted the company’s modest revenue outperformance, driven by the S.E.T. business, despite a selling day impact. The earnings per share (EPS) also exceeded consensus estimates by approximately 3%. According to InvestingPro data, the stock appears undervalued at its current price of $90.64, trading near its 52-week low of $89.92. The company maintains solid fundamentals with a healthy current ratio of 2.44 and has consistently paid dividends for 14 consecutive years. Zimmer Biomet’s EPS guidance was adjusted downward, now set at $7.90 to $8.10, from the prior range of $8.15 to $8.35. This revision reflects the impact of recent currency rate fluctuations, the FNA acquisition, and potential new tariff proposals, which could reduce operating income by $60 million to $80 million. InvestingPro analysis reveals that 7 analysts have recently revised their earnings expectations downward, while the stock has declined nearly 12% in the past week.
The company’s management has reiterated its organic constant currency revenue growth forecast for 2025 at 3.0% to 5.0% but raised its reported revenue growth expectations to 5.7% to 8.2%, up from 1% to 3.5%. This increase includes a potential favorable foreign exchange impact of flat to 0.5%, an improvement from the previous headwind projection of -2% to -1.5%, and the contribution from the FNA deal. For deeper insights into Zimmer Biomet’s growth prospects and comprehensive financial analysis, access the detailed Pro Research Report available exclusively on InvestingPro, covering over 1,400 top US stocks.
Antalffy expressed caution regarding Zimmer Biomet’s outlook, citing the need for more concrete evidence that the company’s new product launches and the recently added FNA pipeline will be sufficient to drive significant market share gains. The analyst emphasized concerns about the company’s ability to increase its weighted average market growth rate (WAMGR) to 5% from the current 4% to 4.25%.
Zimmer Biomet’s stock experienced pressure following these updates, as the market digested the impact of the lowered EPS guidance and the challenges outlined for the remainder of 2025. The company’s performance is anticipated to be heavily reliant on the second half of the year when new products are expected to start contributing to revenue growth.
In other recent news, Zimmer Biomet Holdings Inc. has seen several adjustments in analyst outlooks following its recent earnings report. The company reported first-quarter revenues of $1.909 billion, slightly surpassing consensus estimates of $1.895 billion, with an adjusted earnings per share (EPS) of $1.81, above the expected $1.77. However, Morgan Stanley (NYSE:MS) reduced its price target for Zimmer Biomet from $115 to $95, citing underperformance in the U.S. Knee business and potential tariff impacts. Stifel also lowered its price target from $138 to $115, while Raymond (NSE:RYMD) James adjusted its target from $119 to $104, both expressing concerns over future tariff effects.
Evercore ISI cut its price target to $102 from $116, noting a 2.3% organic revenue beat but highlighting challenges in the U.S. Knees market. Despite these concerns, Zimmer Biomet’s acquisition of Paragon 28 is seen as a positive development, expected to bolster its Surgical, Sports Medicine, Extremities, and Trauma segment. BTIG reduced its price target to $117 from $123 but maintained a Buy rating, acknowledging the company’s growth in revenue and EPS that slightly exceeded expectations. Analysts remain cautious about the impact of tariffs anticipated in 2026, with several firms adjusting their EPS estimates accordingly.
Zimmer Biomet’s management has maintained its growth and EPS guidance for 2025, projecting reported revenue growth between 5.7% and 8.2% year-over-year. The company anticipates organic growth of 3-5% and has acknowledged potential tariff headwinds in the second half of the year. While the company is taking steps to mitigate these challenges, the uncertainty regarding tariffs remains a significant consideration for investors.
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