Henry Schein: Solid Growth but Margin Pressures and Valuation Drive Sell Rating

Erin Wright, an analyst from Morgan Stanley, maintained the Sell rating on Henry Schein. The associated price target is $58.00.

Erin Wright has given his Sell rating due to a combination of factors tied to Henry Schein’s profitability and valuation, despite the company’s robust top-line performance. While internal revenue growth surpassed both Morgan Stanley and consensus expectations across dental, medical, specialty, and technology segments, earnings quality lagged, with EPS beating consensus but falling short of her model primarily on weaker margins.

Looking ahead, the newly introduced 2026 guidance, though in line with the Street on EPS, revenue, and EBITDA growth, signals only moderate earnings acceleration relative to the stock’s current price level. Gross margin compressed year over year and EBITDA margin missed her forecast, suggesting limited near‑term operating leverage. As a result, Wright views the risk‑reward as unfavorable, seeing constrained upside in the shares even if the stock reacts positively in the short term to solid organic growth and reaffirmed medium‑term targets.