Bioventus Inc (BVS) PT Raised to $15 at Canaccord Genuity

Canaccord Genuity analyst Caitlin Cronin raised the price target on Bioventus Inc (NASDAQ: BVS) to $15.00 (from $12.00) while maintaining a Buy rating.

The analyst commented: "BVS posted a strong Q3, beating revenue, adj. EBITDA, and pro forma EPS expectations. It saw DD growth in both its Pain Treatments and Surgical Solutions businesses while continuing improved sales force execution in its Exogen business. While BVS raised the bottom of its revenue and adj. EPS guidance, this raise implies weaker growth Y/Y for the Q4 vs Q3. This makes sense as BVS begins to hit tougher comps given its performance turnaround in the Q4/23. Additionally, it did point out that it expects some weaker growth in its BGS business over the next couple of Qs as it works to onboard new distributors after delaying this onboarding while it managed some supply challenges earlier this year. That said, BVS stressed 2025 expectations for DD growth in Ultrasonics, above market growth in HA, and low-mid single digit growth in Exogen. Additionally, it expects to deliver on 100+bps of adj EBITDA improvement in
2025+ while it anticipates material cash flow from ops acceleration in 2025 by lowering inventory, interest expense, and one-time cash costs. With continued adj. EBITDA improvements, BVS maintained expectations for under 3x net debt to adj. EBITDA before the end of 2025. Finally, it believes its divestiture of its Advanced Rehab business should close late 2024/early 2025 — while only a small part of its financial profile, this divestiture should help reduce debt and sharpen portfolio focus further. We see BVS as increasingly shifting from being a recovery story to an execution story, with the company so far succeeding in improving commercial execution across its major business units. While there is certainly competition for BVS to contend with across PT, SS, and Exogen, BVS has the financial breathing room now to spend on commercial and R&D investments to help BVS play offense and remain competitive. Thus, given operating and commercial
execution beginning to show leverage and still at an attractive valuation, we raise our PT to $15 from $12 and maintain our Buy rating."

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