Needham & Company Upgrades Zimmer Biomet (ZBH) to Strong Buy; Supply Issues Only Temporary

Needham & Company upgraded Zimmer Biomet (NYSE: ZBH) from Buy to Strong Buy with a price target of $148.00 (from $150.00), saying supply issues are only temporary.

Analyst Mike Matson commented, " ZBH missed consensus revenue and met consensus EPS in 3Q16 and management lowered its 2016 guidance. ZBH's pro forma constant currency revenue growth slowed to 1.6% in 3Q16 from 2.6% (adjusted for selling days) in 2Q16 as ZBH suffered from supply disruptions (which hit Knees and Hips particularly hard) and slower than expected Dental growth. Margin performance was weaker than expected and operating margin declined by 200 bps Y/Y decline due to the LDR acquisition; this was offset by a lower than expected tax rate. We upgrade ZBH from Buy to Strong Buy since we view the issues as temporary and expect ZBH's revenue growth to return to ~4% during 2017."

For an analyst ratings summary and ratings history on Zimmer Biomet click here. For more ratings news on Zimmer Biomet click here.

Shares of Zimmer Biomet closed at $105.40 yesterday.

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