Mizuho Securities analyst Steven Valiquette has maintained their neutral stance on SOLV stock, giving a Hold rating on March 9.
Steven Valiquette’s rating is based on a combination of factors that reflect both positive and cautious elements in Solventum Corporation’s outlook. The company is undergoing a significant divestiture of its Purification/Filtration assets, which is expected to enhance earnings per share (EPS) growth to approximately 9.5-10.0% through 2028. However, there are challenges anticipated in 2027 due to a substantial increase in costs related to a contract with 3M, which could impact the company’s financial performance in that year.
Despite these challenges, Solventum’s management has set ambitious targets for reducing debt and improving margins, with plans to use proceeds from the divestiture to pay down debt aggressively. The company is also focusing on revenue growth through increased unit volume rather than price increases, aiming for growth in line with market trends across its segments. While these strategies are promising, the presence of ‘trapped costs’ and the need for significant cost-cutting measures suggest a cautious approach, justifying the Hold rating as the company navigates these transitions.
According to TipRanks, Valiquette is a 2-star analyst with an average return of -0.1% and a 53.68% success rate. Valiquette covers the Healthcare sector, focusing on stocks such as Cencora, Healthequity, and Envista Holdings.
In another report released on March 9, Wells Fargo also maintained a Hold rating on the stock with a $75.00 price target.