Stifel Sees Dental Stocks Outperforming in 2Q, Channel Checks Positive and Valuation Attractive
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Stifel analyst Jonathan Block sees a strong quarter ahead for the Dental Industry, in fact he believes shares could rally to the same degree that Animal Health names performed last quarter.
He stated " we are favorable on Dental stocks into June results with the set-up reminding us of our Animal Health (AH) work before 1Q21 earnings. At that time, many AH names were temporarily out-of-favor as investors pivoted away from WFH stocks to reopening. This occurred despite AH experiencing positive earnings revisions and with the market higher, AH relative multiples collapsed, which then allowed them to rally following strong 1Q21 results. We believe Dental sets up in a similar fashion for 2Q21. The year began with investors wanting to own Dental (reopening), but this theme soon dissipated, and with sentiment souring on supply chain concerns, the stocks have traded down recently. As a result, Dental relative multiples into 2Q21 look similar to AH heading into 1Q21
Key companies he is focused on include:
Align Technology (NASDAQ: ALGN) with a Buy rating and a $750 price target.
Henry Schein (NASDAQ: HSIC), Hold rated with a $77 price target.
Envista Holdings Corp. (NYSE: NVST) Buy rated with a $50 price target
Patterson Cos. (NASDAQ: PDCO) Hold rated with a $30 price target
SmileDirectClub (NASDAQ: SDC) Buy rated with a $13 price target
Dentsply Sirona (NASDAQ: XRAY) Hold rated with a $67 price target
Shares of Align Technology closed at $635.58 yesterday.
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