Kallum Titchmarsh, an analyst from Morgan Stanley, maintained the Hold rating on Embecta Corporation (EMBC – Research Report). The associated price target was lowered to $15.00.
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Kallum Titchmarsh has given his Hold rating due to a combination of factors impacting Embecta Corporation. Despite the potential for a positive shift in stock performance following the upcoming investor day, the company’s shares have experienced significant pressure, declining approximately 40% year-to-date. This downturn is attributed to a lack of clarity on growth catalysts and concerns about margin compression if core business growth slows.
While the core diabetes business is expected to remain steady, with international growth driven by a shift from syringes to pen needles, the overall revenue growth is projected to be flat. There is potential upside from new initiatives, such as the GLP-1 pen needle opportunity, which could enhance revenue. However, the current valuation appears aggressive, leading to a cautious outlook and a Hold rating until further clarity is provided at the investor event.
Based on the recent corporate insider activity of 26 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of EMBC in relation to earlier this year.