On Thursday, Mizuho Securities adjusted its outlook on Livanova (NASDAQ:LIVN), a medical device company, by increasing the stock price target to $80 from the previous $75 while reaffirming a Buy rating on the stock. The revision follows Livanova's first-quarter performance, which exceeded expectations, particularly due to strong sales in its cardiopulmonary division.
The company reported significant year-over-year constant currency growth ranging from 11% to 28% in the United States and international markets. This success is attributed to robust demand for oxygenators, sustained market disruptions benefiting the company, and higher-than-anticipated transitions to new services for Epilepsy treatment.
Livanova's adjusted operating margin also surpassed projections, coming in at 18% against Mizuho's estimate of 13%. This improvement is partly due to the returns on manufacturing investments and cost savings from the wind-down of the Advanced Circulatory Support (ACS) business.
Encouraged by these results, Livanova has updated its full-year 2024 guidance excluding ACS contributions. The company now anticipates a top-line constant currency growth of 8-9% year-over-year, up from the previous forecast of 6-7%, and an adjusted earnings per share in the range of $3.05 to $3.15, an increase from the earlier estimate of $2.95 to $3.05.
The analyst at Mizuho highlighted the influence of the new CEO in steering Livanova forward and expressed confidence in the company's trajectory, as reflected in the raised financial estimates and the maintained Buy rating.
InvestingPro Insights
Following Mizuho Securities' upbeat assessment of Livanova, InvestingPro metrics offer additional context to the company's financial health and stock performance. Livanova's market capitalization stands at $3.39 billion, reflecting substantial investor confidence.
The company has experienced impressive revenue growth over the last twelve months as of Q1 2024, with an increase of 13.4%, signaling its strong sales momentum. Moreover, the stock has seen a remarkable price total return of 32.87% over the past year, aligning with the positive outlook shared by analysts.
Among the InvestingPro Tips, it is worth noting that while Livanova is not currently profitable, with a negative P/E ratio, analysts predict the company will turn a profit this year. The stock is trading near its 52-week high, which could indicate investor optimism about the company's future prospects.
For readers interested in a deeper analysis, there are 13 additional InvestingPro Tips available, including insights on valuation multiples and liquidity assessments. These can be accessed by visiting InvestingPro Livanova, and don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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