Optimistic Buy Rating for Dexcom Despite FDA Warning Letter

Dexcom (DXCM – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst on March 9. Analyst Mike Kratky from Leerink Partners maintained a Buy rating on the stock and has a $95.00 price target.

Mike Kratky’s rating is based on the assessment that the recent FDA warning letter received by Dexcom is unlikely to have a significant impact on the company’s manufacturing capacity or its 2025 revenue guidance. The management has assured that there are no expected material costs that would affect other aspects of their financial guidance. Furthermore, the warning letter does not impede Dexcom’s ability to commercialize its products or necessitate any product recalls.
Despite the potential for some negative headlines, Kratky remains optimistic about Dexcom’s future prospects, particularly looking towards 2025 and beyond. The company’s ability to maintain its manufacturing and sales operations without disruption, along with management’s proactive approach to addressing the FDA’s concerns, supports the Buy rating. This confidence is bolstered by the management’s plan to respond to the FDA soon, which is expected to provide further clarity.

In another report released on March 11, TD Cowen also reiterated a Buy rating on the stock with a $100.00 price target.

Based on the recent corporate insider activity of 77 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DXCM in relation to earlier this year.