Stifel Nicolaus analyst Jonathan Block downgraded the rating on Henry Schein to a Hold yesterday, setting a price target of $75.00.
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Jonathan Block has given his Hold rating due to a combination of factors impacting Henry Schein’s market position and valuation. One of the primary concerns is the anticipated loss of market share in the U.S. consumables business, with a noticeable shift towards online solutions. This trend is expected to continue, posing a significant challenge for Henry Schein in maintaining its current market position.
Additionally, despite these challenges, Henry Schein’s stock is trading at a slight premium compared to its historical average, which raises concerns about its valuation. Furthermore, while there is optimism about potential cost-cutting measures following KKR’s increased involvement, the immediate opportunities seem limited due to previous restructurings. Lastly, there is an increased risk of revenue loss from its largest customer, Heartland Dental, which could further impact the company’s financial performance in the near future.
Block covers the Healthcare sector, focusing on stocks such as Align Tech, Elanco Animal Health, and Idexx Laboratories. According to TipRanks, Block has an average return of 5.2% and a 49.28% success rate on recommended stocks.