HRC - COVID-19 Creating Near-Term Turbulence For Hillrom But The Transformation Is Intact

• Hillrom got a boost from COVID-19-driven demand for beds and monitoring equipment, but that tailwind has faded and now the company is more exposed to near-term capex weakness.
• Digital/mobile communications is an interesting long-term opportunity, as it can drive improved hospital workflows and patient experiences.
• Hillrom doesn't fit cleanly into the predetermined med-tech buckets; it's mid-cap, but not growth, and its operations are capex-weighted, but not necessarily big-ticket capex.
• Mid-single-digit revenue growth and modest margin improvement can support a respectable return from here.

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