Why Is Wall Street Still Upbeat on Dentsply Sirona’s Growth Potential in 2018?

Analyst recommendations for XRAY

Dentsply Sirona (XRAY) is one of the leading dental technology, equipment, and consumables providers in the United States. But the company has been going through some tough times following the merger of Sirona Dental Systems and Dentsply International and the subsequent formation of Dentsply Sirona in February 2016.

The acquisition hasn’t delivered expected synergies, and the company took an impairment charge of $848 million in 4Q17. Dentsply Sirona released its 4Q17 and fiscal 2017 earnings results on March 2, 2018. In this first part of our 14-part series on the company, we’ll take a look at what Wall Street is recommending for Dentsply Sirona now as well as the analyst consensus 12-month target price for the company’s stock.

Why Is Wall Street Still Upbeat on Dentsply Sirona’s Growth Potential in 2018?

As of March 13, 2018, according to the recommendations recorded in a recent Reuters survey from 16 investment research firms, XRAY stock has a “buy” or “strong buy” rating from ten (~62.5%) of those analysts. The stock received a “hold” recommendation from five (~31.3%) of the firms. The remaining analyst has a “sell” recommendation for XRAY stock.

Target prices

According to the Reuters survey mentioned above, the consensus analyst target price for the XRAY stock over the next 12 months is $68.57. This target price reflects a potential 12-month investment return of ~17.4% based on XRAY stock’s closing price of $58.42 on March 12, 2018.

By comparison, peers Zimmer Biomet Holdings (ZBH), Align Technology (ALGN), and Danaher (DHR) have average broker target prices of ~$56.46, $135.65, and $91.08, respectively. These prices represent returns of 12.2%, 20.6%, and 13.0%, respectively, over the next 12 months.

Recent recommendation revisions and updates

On March 8, 2018, Barclays initiated coverage of Dentsply Sirona with an “equal weight” rating and a target price of $62. On March 5, 2018, JPMorgan Chase lowered its price target for XRAY stock from $75 to $70 while maintaining an “overweight” rating on the stock. Credit Suisse lowered its target price for Dentsply Sirona stock from $73 to $69 on March 2, 2018.