CNMD - CONMED upgraded to overweight at KeyBanc on improving financial profile

2023-03-27 12:29:08 ET

• KeyBanc has upgraded CONMED ( NYSE: CNMD ) to overweight from sector weight saying that the medical technology company now faces multi-year organic revenue growth and accelerated gross margin trajectory.
• The firm has a $124 price target (~28% upside based on Friday's close).
• Analyst Matthew Mishan said that management has stated that once its recent M&A becomes organic, it will lead to low-double-digit organic growth.
• He added that while CONMED's margin profile has been impacted by inflationary headwinds, it is poised for ~500 bps of gross margin improvement over the next three years.

• "The main driver [of gross margin improvement ] is mostly its mix of high-growth assets and continued focus on efficiency and productivity at its facilities," Mishan wrote. "It's already made significant investments in its salesforce, and we believe much of the improvement can drop through to EPS."

  • Read why Seeking Alpha contributor GS Investing rates CONMED ( CNMD ) a buy.

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