Hologic (HOLX) PT Raised to $95 at JPMorgan

JPMorgan analyst Casey Woodring raised the price target on Hologic (NASDAQ: HOLX) to $95.00 (from $91.00) while maintaining a Neutral rating.

The analyst comments "After the close, Hologic (HOLX) reported a F3Q24 beat, with revenues of $1.011B coming in above the Street of $1.001B and revenue dollar guidance of $992.5M-1.008B, representing+3.8% organic cc growth (vs. Street of +2.7%) and organic ex-COVID cc growth of +5.8% vs. guide of +4.0-5.6%. Moving down the P&L, adj. OPM of 31.2% came in slightly above the Street of 31.1%, with adj. EPS of $1.06 beating the Street of $1.02 and guide of $0.98-1.05. F3Q performance was paced by +10.5% ex-COVID cc growth in MDx (off of a +12.9% comp),+7.1% cc growth in Breast on the back of imaging recovery and +6.2% cc growth in GYN Surgical. Looking ahead, HOLX lowered its FY24 revenue guidance to reflect: 1) a $20M revenue headwind related to a one-time stop-ship headwind in its non-core Skeletal business (which is expected to be resolved in F1Q25, more detail below); and 2) $4-5M revenue benefit from the Endomagnetics acquisition following deal close in 7/25. While these adjustments resulted in new FY24 guidance that calls for cc revenue declines of -0.5% to -0.1% (vs. Street of +0.2% and prior guide of -0.8% to +0.4%) and organic ex-COVID growth of +5.2-6.5% (vs. prior guide of +5.1-6.5%), outside of these adjustments the company noted no other significant change to guidance assumptions (outside of a slight change in FX) and after rolling forward the F3Q beat HOLX expects core organic growth for each business segment of+MSD ex-COVID in both 4Q and FY24, in-line with prior expectations. On the bottom-line, the company is now calling for FY24 adj. EPS of $4.04-4.11 vs. Street of $4.07 and prior guide of $4.02-4.12, partially benefitting from favorable adjustments to other income within the new guide (now guiding to total other expense of -$8M this year vs. -$30-40M prior). Stepping back, while the quarter was a messy one with one-time headwinds/adjustments to numbers obfuscating solid underlying core growth (highlighted once again by strength in MDx), we remain positive on HOLX’s ability to achieve its LT financial targets of +5-7% top-line ex-COVID and+HSD/LDD adj. EPS growth and see no change to our investment thesis following the quarter. As such, we maintain our Overweight rating and roll forward our DCF to establish a Dec. ’25 PT of $95. As an aside, we are hosting HOLX CEO Steve MacMillan as part of our CEO Call series on August 19th (registration details to follow)."

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