BTIG Upgrades STAAR Surgical (STAA) to Buy

BTIG analyst Ryan Zimmerman upgraded STAAR Surgical (NASDAQ: STAA) from Neutral to Buy with a price target of $46.00.

The analyst comments "We are upgrading STAA for a few reasons 1). Mgmt. has reset numbers to the point that they are in a good spot to be beat. Unit volume growth is essentially zero in FY24. 2). Over the past few weeks, we've spoken with multiple ophthalmologists in China about competitive ICLs forthcoming. We note that Eyebright Medical Technology (688050-SH, Not Rated) has submitted its ICL and we would expect clearance late in FY24. That said, we came away from these calls less concerned that this will present a near-term headwind to STAA in China. 3). We've become less focused on the US. In our view, even if channel checks are positive, we don't think it's enough to move the needle. The US business is less than 10% of total sales for the foreseeable future and mgmt.'s acknowledgement that EVO in the US should be focused on severe myopes is the right strategy to garner traction (and then expand from there) as opposed to a scattershot winner-take-all approach. In sum, STAA mgmt. has done what they can to put shares in a position to be successful. Our biggest hang-up has been the Chinese economy; it's no secret that data shows that the Chinese consumer is weak, and this has bled into the Chinese refractive surgery market as LVC prices have come down while competition is high. There is still uncertainty in China (a persistent weak economy, potential US-Chinese trade-wars, and other geopolitical risk) which may weigh on shares but what if it's not as bad as Carl Zeiss (AFX-ETR, Not Rated) and others have said? What if STAA can still beat its numbers despite China? We think much of the weakness in China is priced into shares and if the Chinese economy and the Chinese refractive market prove better than we all fear, shares can work. At the same time, despite China, we think if STAA remains on track to expectations in other key OUS markets, shares can also work from current levels."

For an analyst ratings summary and ratings history on STAAR Surgical click here. For more ratings news on STAAR Surgical click here.

Shares of STAAR Surgical closed at $38.07 yesterday.

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