In a report released yesterday, Marie Thibault from BTIG reiterated a Buy rating on Embecta Corporation (EMBC – Research Report), with a price target of $25.00.
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Marie Thibault’s rating is based on Embecta Corporation’s strategic initiatives and financial projections presented during their Analyst & Investor Day. The company outlined a plan to transition into a broader medical supplies company, aiming for stable revenue growth and a significant free cash flow target of approximately $600 million by fiscal year 2028. This financial strategy includes paying down a substantial portion of their debt and issuing dividends, which is expected to enhance their financial flexibility and reduce leverage.
Additionally, the company plans to capitalize on new revenue streams, such as the administration of generic GLP-1s, which is projected to contribute significantly to their annual revenue by 2033. Despite some anticipated challenges like inflationary pressures and pricing competition, Embecta’s valuation remains attractive, trading at less than four times the projected free cash flow per share for fiscal year 2025. These factors collectively support the Buy rating, reflecting confidence in the company’s ability to achieve its long-term financial goals and expand its market presence.
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.