Raymond James upgraded Masimo Corporation ( NASDAQ: MASI ) to Outperform from Market Perform on Wednesday, expecting the MedTech company to beat Street forecasts when it issues Q4 financials next week.
"No other company in our coverage offers as many paths to incremental value creation, leaving us to believe that neutral is not the right side to be on," the analyst Jayson Bedford who issued a $187 per share target on the stock, wrote.
Bedford notes that the company has already issued 2023 guidance which he expects to trend higher with fewer forex headwinds.
In January, U.S. International Trade Commission ruled that Apple ( AAPL ) violated one of Masimo's ( MASI ) pulse oximeter patents.
The analyst argues that if the next two steps in the case go in the company's favor, Masimo ( MASI ) is positioned to extract royalties leading to a new stream of revenue/ profit.
"We still think this is a long shot, but there is little baked into the stock for this outcome," Bedford added.
The analyst also appreciated the company's diverse pipeline and argued that the involvement of active investors would ensure that its interests would align with those of shareholders despite the potential for management distraction.
However, Seeking Alpha contributor The Value Pendulum issued a Hold rating on Masimo ( MASI ) in January, noting that " its valuations are demanding."
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Masimo raised to Outperform at Raymond James ahead of Q4 earnings