Truist Securities initiated protection on Integer Holdings Company ITGR, noting the corporate as one of many largest med machine outsource producers and a singular SMID MedTech asset.
The analyst notes Integer’s profitability and leveraged EPS development prospects (1.5-2x that of income), which might maintain a high-teens 2023-2026 EPS CAGR.
Integer has growing publicity (by the OEM provide chain) to development segments & rising product cycles throughout the MedTech sector, Truist writes.
Additionally, a sturdy inorganic (tuck-in) technique can add a minimum of 1-2%+ on prime of a high-single-digit natural top-line, the analyst provides.
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Truist initiates with a Purchase ranking and a value goal of $137.
Integer has an 18 to twenty p.c share in its served markets, which whole about $9 billion. The development is towards elevated producer outsourcing because the business seeks to cut back prices and add redundancy.
Truist notes that the “med machine outsourcing sector is ripe for a participant like Integer to drive consolidation because it leverages its rising scale inside a extremely fragmented market.”
Truist initiatives Integer to realize 8-9% natural income development, surpassing its weighted common market development charge of 4%-6%, pushed by the corporate’s strategic shift in the direction of faster-growing markets, elevated market share, and benefits of scale in a consolidating med machine outsourcing business.
Moreover, with an annual M&A funds of $250-300 million, the analyst expects a further 200 foundation factors of development per 12 months.
In April, Integer reported first-quarter adjusted EPS of $1.14, beating the consensus of $1.11. Gross sales have been $414.81 million, up 10% (natural development of 6%), beating the consensus of $412.83 million.
Worth Motion: ITGR shares are up 4.76% at $117.34 ultimately test Wednesday.
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