Thursday, Truist Securities adjusted its price target on Integer Holdings (NYSE:ITGR), a medical device outsource manufacturer, to $147.00 from $147.00 while reiterating a Buy rating on the stock. The revision follows the company's reported organizational revenue shortfall, attributed to slower growth in its Cardiac Rhythm Management (CRM) and neuromodulation segments and temporary disruptions caused by hurricane impacts, which are expected to recover in the fourth quarter.
Despite the revenue miss, Integer's operational margins and earnings per share (EPS) exceeded expectations. Truist Securities highlighted the rarity of small to mid-size (SMID) MedTech companies that demonstrate double-digit EPS growth, suggesting that this could provide support for the company's stock multiples as EPS estimates increase. The firm also noted Integer's underappreciated potential for future earnings.
Management at Integer has raised its organic growth guidance for 2024 to 7-8%, up from the previous range of 6-8%. This adjustment indicates a significant acceleration in the fourth quarter, driven by better visibility into customer trends in the Cardio and Pre-Market Approval (PMA) businesses, additional selling days, and a return to normalcy following the hurricane impact.
The price target reduction to $147 from $150 by Truist Securities is based on a slightly lower price-to-earnings (P/E) ratio. The firm's analysis considers the company's solid performance in operational margins and EPS, alongside expectations of a strong recovery in the upcoming quarter.
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