December 6, 2023

Needham analyst Mike Matson reiterated the Purchase ranking on Benefit Medical Programs, Inc. MMSI, decreasing the value goal to $81 from $96.

Benefit Medical delivered a street-beating efficiency in Q3 2023, the place reported income of $315.2 million was up 9.8% year-over-year.

In line with the analyst, Benefit Medical is present process a turnaround after encountering challenges with a number of acquisitions and seeing its working margin decline. 

Matson initiatives the income development to return to the mid-single digits or higher and EPS development to return to fifteen%+.

Administration is implementing an in depth plan to drive its working margin greater and enhance money circulate, with a goal of reaching an 18-21% working margin in 2023, the analyst provides.

The analyst raised 2023E and 2024E income estimates to $1.250 billion from $1.237 billion and to $1.340 billion from $1.327 billion, respectively. Matson additionally elevated 2023E and 2024E EPS estimates to $2.96 from $2.91 and to $3.25 from $3.23, respectively.

Nevertheless, the analyst lowered the value goal to replicate a downward revaluation of the corporate’s friends.

The analyst’s 12-month worth goal for Benefit Medical of $81 is predicated on a a number of of 25.0x of the analyst’s new 2024E EPS estimate. 

This a number of is above Benefit Medical’s small/mid-cap GARP medical gadget friends (buying and selling at a median 2023E P/E of 21.4x) and its small/mid-cap cardiovascular friends (buying and selling at a median 2023E P/E of 21.4x) attributable to its greater income and EPS development.

Value Motion: MMSI shares are buying and selling greater by 7.32% to $68.14 on the final test Friday.

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