Cautious Outlook for Zimmer Biomet Holdings Amid Tariff Exposure and Conservative Guidance

Analyst Travis Steed from Bank of America Securities maintained a Hold rating on Zimmer Biomet Holdings (ZBH – Research Report) and decreased the price target to $110.00 from $135.00.

Travis Steed’s rating is based on several factors that suggest a cautious outlook for Zimmer Biomet Holdings. The company’s Q1 revenue growth, although slightly above street expectations, fell short of investor expectations due to a conservative guidance issued by the company. Additionally, the growth in US knees was lower than anticipated, and the Q2 revenue guidance was also below expectations, partly due to order delays and changes in the US commercial organization.
Another significant factor influencing the Hold rating is the company’s exposure to tariffs, particularly those involving China, which is expected to have a substantial impact on revenues. The anticipated tariff impact, along with the Paragon28 acquisition, has led to a reduction in free cash flow guidance and a lowered EPS forecast for 2025. Despite maintaining the full-year organic revenue guidance, these challenges, combined with a revised price objective reflecting lower peer multiples, justify a neutral stance on the stock.

In another report released yesterday, Citi also maintained a Hold rating on the stock with a $104.00 price target.

Based on the recent corporate insider activity of 30 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 ZBH in relation to earlier this year.