©Reuters. Jefferies downgrades Masimo (MASI) to Hold as “good news has arrived”
Jefferies downgraded global medical technology company Masimo (NASDAQ:) to ‘Hold’ from ‘Buy’. At the same time, analysts set a new higher price target of $121 for the stock. The change is based on current assessments and the belief that the positive outlook for the company is already established.
“Overall, we believe the worst is behind MASI, following a challenging ’23 that resulted in multiple downward revisions,” analysts wrote in a note to clients Monday.
The downgrade comes just as Jefferies notes that Masimo’s trends and outlook have improved, especially in the HC sector. Other positives include the company’s recent win over AAPL in its ITC challenge and some relief after ’24 guidance that “alleviated concerns about cost returns and weakening EPS growth.”
“That said, we now see a lot of good news and are moving to the margins based on valuation,” they wrote.
With shares up more than 65% from October lows and trading at ~42x forward EPS (~37x using new Non-GAAP), Jefferies no longer sees MASI as cheap for growth , noting that it traded above the previous price target.
“[F]fundamental upside from here may be limited,” they wrote.
Following the downgrade, Masimo shares are trading 1.95% lower at $127.72 on Tuesday morning.