Owens & Minor: Hold Rating Amidst Uncertainty and Strategic Adjustments

Analyst Michael Cherny from Leerink Partners reiterated a Hold rating on Owens & Minor (OMI – Research Report) and keeping the price target at $8.50.

Michael Cherny has given his Hold rating due to a combination of factors affecting Owens & Minor’s current market position. The termination of the Rotech acquisition, while seen as a positive move to avoid the heavy lift required for targeted returns, leaves the company’s equity value in a state of uncertainty until there is clarity on the potential sale of its Products & Health Services division. Despite the discounted valuation, the company lacks strong growth drivers, which justifies the Hold rating.
Additionally, while the focus on Patient Direct as a growth area remains, the company must navigate the challenges of an uncertain tariff environment. The decision to terminate the Rotech deal, although beneficial in reducing leverage in the long term, incurs short-term costs that impact debt paydown. Consequently, the financial estimates for the coming years have been adjusted downward, reflecting these changes and supporting the decision to maintain a Hold rating.

In another report released on June 6, Robert W. Baird also maintained a Hold rating on the stock with a $10.00 price target.

OMI’s price has also changed dramatically for the past six months – from $13.870 to $7.610, which is a -45.13% drop .