CNMD Stock Hits Highest Level In Over Four Months – Why JPMorgan Believes Firm Would Be Highly Attractive To ‘Financial Acquirers’

• JPMorgan believes Conmed’s fundamentals would make it "look highly attractive to financial acquirers."
• Needham opined that a Conmed sale makes sense given its mid-single-digit growth, "strong recurring revenue composition, and depressed valuation."
• For the first quarter, the company reported revenue of $317 million and adjusted earnings per share of $0.89.

Shares of Conmed (CNMD) attracted significant investor attention on Monday after analysts commented on the reported buyout interest received by the medical technology company last week.

At the time of writing, CNMD shares shot up more than 10%, hitting a four-month high.

On Friday, a Bloomberg Law report indicated that the company is considering a sale and working with advisers to explore strategic options after private equity investors expressed interest in acquiring it.

JPMorgan’s Take On Conmed

JPMorgan said Conmed’s fundamentals "likely make it less attractive" to a strategic buyer, but its free cash flow yield and "clean financials" would make it "look highly attractive to financial acquirers," and it could fit into a broader portfolio of orthopedic products, according to TheFly.

JPMorgan said it is "hopeful" that Conmed is on an upward trajectory after "a tough run the last few years." It has a ‘Neutral’ rating and a price target of $40.

For the first quarter, the company reported revenue of $317 million, down 1.3% year-over-year but up 2.1% organically on a constant-currency basis. Adjusted earnings per share came in at $0.89. Both were ahead of the consensus estimates polled by Fiscal AI.

Needham Believes A Sale Makes Sense

The firm thinks a Conmed sale makes sense given its mid-single-digit growth, "strong recurring revenue composition, and depressed valuation." Moreover, Needham said Conmed could be attractive to larger companies, with Zimmer Biomet (ZBH) making the most sense.

Meanwhile, on Stocktwits, retail sentiment around CNMD stock remained in ‘bullish’ territory over the last 24 hours. CNMD stock is up more than 4% so far this year but down more than 15% over the last 12 months.

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