Owens & Minor (OMI) PT Lowered to $7 at UBS

UBS analyst Kevin Caliendo lowered the price target on Owens & Minor (NYSE: OMI) to $7.00 (from $13.00) while maintaining a Buy rating.

The analyst comments "OMI's 2Q results and outlook were disappointing, in our view. As we consider how to value the company forward, we are updating our price target to $7 (from $13). Our valuation framework considers potential proceeds of ~$700M, allowing OMI to de- lever. Though the P&HS sale causes NT dis-synergies and the loss of Kaiser impairs 2026 EBIT, we envision more prospects for upside potential on: (1) tighter mgmt focus in Diabetes recovery and Sleep momentum, (2) less risk to a challenged hospital purchasing base and product importation, and (3) improved working capital as OMI shifts away from less profitable, capitated business. Our significantly lowered EBITDA and EPS estimates remove PH&S operations and assume capex efficiencies by 2027 but does not assume a tailwind from changes to tax policy through OBBA. Our $7 price target is anchored to 7x NTM + 12Me EBITDA less Pt Capex (closest peer AHCO is trading at 7x on this same basis)."

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