DexCom raised, AngioDynamics cut as RayJay reviews post-COVID MedTech
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DexCom (NASDAQ:DXCM) gained, and AngioDynamics (NASDAQ:ANGO) dropped in the pre-market trading Monday after Raymond James changed their ratings, examining the post-COVID impact on the MedTech space.
The analyst Jayson Bedford projects MedTech to bounce back after two years of COVID-related impact characterized by factors including demand disruption and supply chain issues.
"This dynamic has disturbed Med Tech's historical growth algorithm, and understandably resulted in less interest from the generalist investor," the analyst wrote.
With COVID-19 in the rear-view mirror, Bedford projects the industry to return to the historical 5% top/10% bottom-line growth profile. The analyst projects EPS growth to lag the ongoing organic topline growth as supply chain challenges remain.
"However, we expect EPS growth to accelerate in 2H23 and into '24, which has the potential to offer a differentiated growth profile vs. the broader market," Bedford wrote.
The analyst upgraded DexCom (DXCM) to Strong Buy from Buy and lifted its price target to $138 from $127, noting that the company is the "most dynamic large cap growth story in Med Tech." In addition to DXCM, he prefers Boston Scientific (BSX), Zimmer Biomet (ZBH), and Merit Medical Systems (MMSI) in the MedTech space.
However, Bedford downgraded AngioDynamics (ANGO) to Outperform from Strong Buy, arguing that the "overhang around litigation-related liabilities will continue to weigh on sentiment, and makes the stock less 'offensive' in the near-term."
Wall Street has remained bullish on ANGO stock, with an average rating of Buy from analysts, while Seeking Alpha's Quant System, which consistently beats the market, rated ANGO as a Strong Sell.