Hologic shares undervalued – Needham & Company

Needham & Company upgraded shares of Hologic (NASDAQ:) to Buy from Hold, assigning a price target of $95 per share in a note Friday.

Analysts told investors that easing Covid testing headwinds will unmask growth drivers for the company.

“We think the COVID-related headwind will soon end and that HOLX can grow at least at its 5-7% organic ex-COVID growth target,” they explained.

“Additionally, we foresee potential for above-normal non-COVID Diagnostics, Breast Health, and GYN Surgical growth in the next few quarters. We also believe that HOLX can drive ~50+ bps of annual operating margin improvement and 8-12% EPS growth,” they added.

The analysts concluded that based on the growth profile and HOLX’s P/E of 20.2x, Needham’s CY2023 estimate, they believe that the company’s shares are undervalued.