Zimmer Biomet fell 3.7% after reporting that second-quarter adjusted earnings per share plummeted to $0.05 from $1.93 in the year-ago quarter. Meanwhile, analysts had expected a loss of $0.73 per share.
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Zimmer’s (ZBH) revenues declined over 38% to $1.23 billion year-over-year but surpassed Wall Street expectations of $909.4 million as the coronavirus pandemic resulted in a global decline in elective procedure volumes. However, the healthcare products maker said it is now witnessing incremental recovery in elective procedures since May.
Canaccord Genuity analyst Kyle Rose raised the stock’s price target to $150 (14.8% upside potential) from $137, and kept a Buy rating, ahead of 2Q earnings. Rose said “the near/medium-term economic impact of the pandemic, clarity around the durability of procedural volumes, the impact of the capex cycle, capacity for elective procedures over the medium term, management cut “too-deeply” to minimize cash burn.”
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 13 Buys, 4 Holds, and 1 Sell. With shares down about 13% this year, the average price target of $141.67 implies upside potential of about 8.4%. (See ZBH stock analysis on TipRanks).
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