Omnicell (OMCL) PT Lowered to $38 at BofA Securities

BofA Securities analyst Allen Lutz lowered the price target on Omnicell (NASDAQ: OMCL) to $38.00 (from $46.00) while maintaining a Neutral rating.

The analyst comments "Why it matters: Adds to execution risk in the near term We view the reaffirmed guidance as a positive, but the CFO transition adds incremental execution risk in the near term. FY25 is a crucial year for Omnicell as the company looks to fill a gap in XT cabinet upgrade-driven product revenues with new product releases, such as XT Amplify. OMCL has executed well over the last year, and FY25 should still benefit from strong backlog, supported by the tail-end of XT upgrades. However, growing product revenue beyond FY25 will likely require accelerating adoption of new products to offset the gap in XT cabinet revenue. Execution on this front through FY25 should be a key signal for the trajectory of product revenues in FY26 and beyond. We remain optimistic on the Advanced Services business and mid-single-digit+ growth supported by growing demand for Specialty pharmacy, but we continue to be cautious on product revenue growth beyond FY25. Ultimately, we appreciate OMCL's leading position in pharmacy automation and look for execution on new products over the coming year to get more constructive. We reiterate our Neutral rating. We lower our PO to $38 (From $46), reflecting 11.5x CY25 EV/EBITDA vs. 14x prior. We reduce the multiple to reflect incremental execution risk given the management transition and to reflect peer group multiple compression. Our FY25 estimates are unchanged."

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