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Increasingly Bullish Wall Street Ratings for ZBH

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Jan. 25 2018, Published 8:54 p.m. ET

The latest analysts recommendations for ZBH stock

Zimmer Biomet Holdings (ZBH) is the leader in the US musculoskeletal market. For the last few quarters, the company’s business was facing weakness due to internal and external factors such as supply issues, the impact of hurricanes Irma and Maria, and knee implant price cuts in India. The company reported disappointing 3Q17 earnings on November 1, 2017, and reduced its fiscal 2017 guidance as well. However, Wall Street analysts are increasingly upbeat about ZBH stock. In this article, let’s take a brief look at the latest analyst recommendations and target prices for ZBH.

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As of January 24, 2018, of 28 investment research firms included in a recent Reuters survey, ZBH got “strong buy” ratings from ~35.7% of analysts (ten) while the same number of analysts provided a “buy” rating. The stock got “hold” ratings from ~44.4% of analysts (eight). There’s no “sell” rating on ZBH.

Target prices

As of January 24, analysts’ consensus 12-month target price for ZBH stock is $135.27, which represents a potential return of 8.6% on an investment in ZBH for the next 12 months. The stock’s closing price on January 23, 2018, was $124.51.

In comparison, ZBH’s peers Stryker (SYK), Medtronic (MDT), and Abbott Laboratories (ABT) have consensus 12-month target prices of $165.13, $91.78, and $63.72, respectively. So investors might have upside potential of approximately 2%, 7.7%, and 7.6%, respectively, in these stocks for a 12-month investment horizon.

Rating revisions and updates

On January 5, Canaccord Genuity reaffirmed its “hold” recommendation on ZBH. It has a target price of $132 on the stock. Cantor Fitzgerald reiterated its “overweight” rating on ZBH.

On December 19, 2017, Goldman Sachs upgraded its rating on Zimmer Biomet Holdings from “sell” to “hold.”

Notably, the Vanguard Russell 3000 ETF (VTHR) invests ~0.19% of its total holdings in ZBH.

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