NVST - Envista: No Longer A Buy Considering Weaker-Than-Expected Profitability (Rating Downgrade)

2024-02-11 02:48:36 ET

Summary

• Envista's Q4 2023 bottom line missed the analysts' expectations by a significant -13.6%, and its FY 2024 EBITDA margin guidance was -1.6 percentage points lower than the consensus projection.
• However, there are potential catalysts for NVST such as lower-than-expected interest costs going forward, and better-than-expected EBITDA margin targets outlined at its upcoming 2024 Investor Day.
• I lower my rating for Envista to a Hold, taking into account both its disappointing 2024 operating profitability prospects and the presence of potential re-rating catalysts.

Elevator Pitch

I rate Envista Holdings Corporation ( NVST ) as a Hold.

My prior write-up published on October 31, 2023 was focused on analyzing Envista's M&A growth potential and 2024 financial prospects. With this latest update, I draw attention to NVST's most recently announced financial results for the final quarter of the previous year....

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