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Which Way Are Zimmer Biomet’s Analysts Leaning after 2Q17?

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ZBH’s analyst recommendations

On the basis of the recommendations of 29 brokerage companies in a recent Reuters survey, 18 (62%) analysts gave Zimmer Biomet Holdings (ZBH) stock a “buy” rating. Nine (~31%) provided a “hold” rating, while two (~7%) gave ZBH a “sell” recommendation.

As of August 30, 2017, the consensus 12-month target price for ZBH stock is $135.65, amounting to a ~20% return potential over its closing price of $112.8 on August 29, 2017.

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Target prices

Zimmer Biomet has a highest 12-month target price of $158, and a lowest 12-month target price of $92, according to the latest analyst recommendations. These target prices suggest a maximum return potential of ~40% on the stock over the next year and a maximum downside risk of about -18%.

On August 14, 2017, Oppenheimer Holdings gave ZBH stock a “buy” rating, with a price target of $137. Soon after ZBH’s 2Q17 earnings release on July 27, the company’s stock received an “outperform” rating, and BMO Capital Markets raised its price target rose from $136 to $140 on July 28. On the same day, Leerink Swan also increased its price target for ZBH from $141 to $146, after the company released disappointing 2Q17 results.

By comparison, Abbott Laboratories (ABT), Medtronic (MDT), and Thermo Fisher Scientific (TMO) have average broker target prices of $54.94, $91.4, and $54.90, respectively. These figures imply returns of 9.6%, 14.5%, and 11.3%, respectively, over the next 12 months.

Investors interested in gaining diversified exposure to Zimmer Biomet Holdings can consider the iShares Russell Mid-Cap ETF (IWR), which has ~0.35% of its total portfolio in ZBH stock.

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