Morgan Stanley Downgrades DENTSPLY SIRONA (XRAY) to Equalweight

Morgan Stanley analyst Erin Wright downgraded DENTSPLY SIRONA (NASDAQ: XRAY) from Overweight to Equalweight with a price target of $14.00 (from $21.00).

The analyst comments "After being the worst performer in the group in 2024 (-47% vs. -21% dental group and +23% S&P 500), XRAY's shares are down 21% YTD (vs. -16% group and -5% S&P 500) primarily on the macro/policy backdrop and its plans to refocus the Byte business model around treatments that include expanded in-person dentist oversight (vs. at-home). Investor expectations are likely the lowest in the dental space, where headwinds in imaging and implants are well telegraphed. That said, investors will be listening for news within the orthodontics business (Byte and SureSmile) and progress the company is making in returning to market growth within implants and cost-cutting initiatives. While we are not expecting positive revisions to FY25 guidance (-4% to -2% organic growth), we will be looking for updates on its recent Primescan 2 launch, distributor relationships (e.g. PDCO, HSIC), signs of enhanced visibility within dental end markets, and listening for updates on the restructuring effort, specifically on SKU rationalization. In terms of tariff exposure, the company has limited exposure to China (<5% of raw materials), Canada (<5% of raw materials), and Mexico (<1% of raw materials). However, it has global manufacturing sites elsewhere, namely in Europe. Of note, XRAY currently has an interim CFO (Herman V. Cueto) as the company continues its CFO search (since August 2024). Additionally, the company has initiated a process to evaluate strategic alternatives for its Wellspect Healthcare business (bladder and bowel management care products; ~8%/~11% of total revenue and total operating income) to allow the company to focus its resources/attention on its dental business."

For an analyst ratings summary and ratings history on DENTSPLY SIRONA click here. For more ratings news on DENTSPLY SIRONA click here.

Shares of DENTSPLY SIRONA closed at $13.08 yesterday.

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