BTIG Defending Globus Medical (GMED): 'Share Reaction Overdone'

BTIG analyst Ryan Zimmerman reiterated a Buy rating and $75.00 price target on Globus Medical (NYSE: GMED)

The analyst comments "This morning, the FDA posted a Warning Letter (here) addressed to GMED regarding a number of deficiencies within its manufacturing facilities in Audubon, PA regarding the ExcelsiusGPS. This is the first time, we can recall or find within the FDA database, in which GMED has received a Warning Letter from the FDA. While the Letter outlines a number of issues which GMED will have to resolve, we think the move in shares is overdone. GMED's Emerging Technology business comprised almost entirely of ExcelsiusGPS sales was ~8% in FY23 and we expect it to be ~6% in FY24. Presently GMED shares are down ~8% shedding ~$1B in market value for a business that does ~$120M - $140M in sales growing in the highteens. The Warning Letter does not preclude GMED from selling ExcelsiusGPS at this stage. While investors may worry that competitors could use this to counter-detail against GMED, specifically within spinal robotics, we think GMED's business, outside of robotics has enough of a market presence (#2 in the spinal implant market) that share shifts of greater magnitude within spinal hardware are unlikely. This is further evidenced by the growth GMED has put up the past two quarters, which has come in ahead of Consensus expectations as legacy NuVasive is integrated into the company."

For an analyst ratings summary and ratings history on Globus Medical click here. For more ratings news on Globus Medical click here.

Shares of Globus Medical closed at $73.05 yesterday.

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