Michael Toomey, an analyst from Jefferies, has initiated a new Hold rating on Solventum Corporation (SOLV).
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Michael Toomey has given his Hold rating due to a combination of factors affecting Solventum Corporation. The company, which spun off from 3M in early 2024, has made significant strides in reshaping its portfolio and cutting costs, aiming for organic growth of 2-3% in 2025 and setting targets for 4-5% revenue growth and a 10% EPS CAGR through 2028. Despite these positive developments, Solventum’s shares are trading at a valuation multiple below its peers, reflecting a back-end loaded growth profile and limited upside to medium-term forecasts.
Solventum’s growth strategy focuses on five key areas, expected to drive over 80% of future growth. However, the growth is projected to be steady rather than transformative, as already modeled in consensus estimates. While the company is progressing well post-spin, with a promising pipeline and ongoing transformation, the realization of its long-term growth targets largely aligns with market expectations. A material re-rating of the stock would likely require a clear catalyst, such as exceeding market growth expectations or significant margin improvements.
In another report released on September 9, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $77.00 price target.
SOLV’s price has also changed slightly for the past six months – from $77.640 to $71.220, which is a -8.27% drop .