By Fink Densford
ConMed could be poised for some merger & acquisition activity as new management engineers a turnaround, according to a Wall Street analyst.
ConMed (NSDQ:CNMD), in the middle of an under-appreciated turnaround, could be poised to augment its growth via selective acquisitions, according to Leerink Partners analyst Richard Newitter.
Newitter, who upgraded CNMD shares to “outperform” and boosted the price target to $64 from $60, wrote in a note to investors yesterday that ConMed’s “turnaround and 2-3 yr sales/EPS growth prospects are underappreciated.”
“Moreover, our conviction in estimate upside is enhanced by potential for tuck-in M&A (not in models) to drive even more rapid margin expansion and EPS power vs. out-yr consensus,” Newitter wrote. “Recent announcements (i.e., new head of [business development], expanded credit facility) & mgmt commentary at investor conferences to us suggest M&A could begin to take form sooner vs. later – and we believe tuck-in deal announcements will drive further multiple expansion for the stock given the est. upside it could engender.”
