Bank of America Securities analyst Allen Lutz maintained a Sell rating on Owens & Minor yesterday and set a price target of $4.70.
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Allen Lutz has given his Sell rating due to a combination of factors impacting Owens & Minor’s financial outlook. Despite the positive news of a partnership with Optum Health, which could potentially increase patient volumes, the company faces significant challenges. The partnership, while beneficial, is not exclusive and requires substantial investment in education and sales outreach to drive adoption, which could strain resources.
Additionally, Owens & Minor is navigating a delicate balance between reducing its high debt levels and investing for growth in a competitive industry. The company’s net debt to equity ratio remains significantly high, indicating financial leverage concerns. Furthermore, the stock’s price objective is lower than its current trading price, suggesting limited upside potential. These factors contribute to the Sell rating as the company works through its broader turnaround strategy.
According to TipRanks, Lutz is a 4-star analyst with an average return of 7.1% and a 63.23% success rate. Lutz covers the Healthcare sector, focusing on stocks such as Doximity, Teladoc, and CVS Health.