JPMorgan Downgrades TransMedics Group (TMDX) to Neutral

JPMorgan analyst Allen Gong downgraded TransMedics Group (NASDAQ: TMDX) from Overweight to Neutral with a price target of $75.00 (from $116.00).

The analyst comments "We’re entering the new year on the back of a mixed 2024 with lingering questions on the near-term outlook balanced against a bullish longer-term view. The company’s recent analyst day made it clear that the remaining opportunity for TransMedics is significant between the potential revitalization of heart and lung, future launches like next-gen OCS and kidney, and upside from an almost entirely untapped international market, all of which should sustain growth and drive profitability. However, we think the near-term outlook remains less certain as questions remain on the softness seen in 3Q24 and 4Q24E, a setup further complicated by a back-end-loaded 2025 guide that looks more achievable than beatable. To be clear, today’s share price reflects a significant discount on the company’s longer-term prospects as the transplant market remains significantly underpenetrated and the combination of OCS and NOP continues to arguably be the most differentiated offering available on the market. We think SMid-cap growth stories need to demonstrate meaningful near-term upside to truly outperform, however, so we’re downgrading shares of TMDX on this 12-month view and establishing a Dec 2025 price target of $75 (prior Dec 2024 price target of $116), which reflects a ~4.5x 2026E EV/sales valuation, roughly in line with the broader peer group."

For an analyst ratings summary and ratings history on TransMedics Group click here. For more ratings news on TransMedics Group click here.

Shares of TransMedics Group closed at $64.22 yesterday.

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