Zimmer (ZMH) Sell-Off Creates Attractive Risk/Reward, Leerink Partners Says; PT Trimmed to $130

Leerink Partners analyst Richard Newitter trimmed his price target on Zimmer Holdings (NYSE: ZMH) to $130.00 (from $135.00) following in-line Q1 results but reiterated an Outperform rating saying the sell-off crates more attractive risk/reward.

Newitter commented, "ZMH's 1Q was essentially in line, but the main focus was below-consensus ZMH/Biomet pro forma (PF) EPS guidance which understandably pressured the stock. We’re inclined to think this initial newco guidance should set up a conservative “pro forma bar” on which to execute (and hopefully beat) in future qtrs, perhaps even serving as a clearing event of sorts for the stock as consensus PF estimates will likely re-calibrate lower ahead of deal close (now pushed out to May). Our PT reduces to $130 (vs. $135)on lower '16E PF EPS (now $7.90 vs. $8.20), but still reflects a compelling risk-reward and a valuation discount to large-cap MedTech that doesn't appropriately reflect long-term BMET deal accretion in our view."

For an analyst ratings summary and ratings history on Zimmer Holdings click here. For more ratings news on Zimmer Holdings click here.

Shares of Zimmer Holdings closed at $109.84 yesterday.

You May Also Be Interested In

• Delek Logistics Partners, LP (DKL) PT Raised to $54 at Mizuho
• Ionis Pharmaceuticals (IONS) PT Lowered to $94 at TD Cowen
• Phillips 66 (PSX) PT Raised to $207 at Jefferies