Yahoo Finance Rising Costs Hurt Henry Schein, End-Market Trends a Tailwind
On Nov 21, we issued an updated research report on Henry Schein, Inc. HSIC. The company carries a Zacks Rank #4 (Sell).
Henry Schein exited third-quarter 2017 on a mixed note with earnings missing and revenues beating the Zacks Consensus Estimate. We are disappointed with the company’s lowering of the high end of the 2017 EPS guidance. Meanwhile, the year-over-year deterioration in Henry Schein’s gross and operating margin was led by higher cost of sales and expenses. A tough competitive landscape and pricing pressure also weigh on the stock.
Shares of the company have underperformed the broader industry over the past month. The stock has lost 20.8% against the 1.6% gain of the broader industry.
On a positive note, we expect this trend to improve on balanced growth across all four operating segments of Henry Schein. We are also encouraged by the company’s efforts to grow internationally. Apart from North America and Europe, it has presence in Australia and New Zealand as well as in the emerging markets of China, Brazil, Israel, Czech Republic and Poland.
Henry Schein, Inc. Price
Henry Schein, Inc. Price | Henry Schein, Inc. Quote
Also, this leading distributor of health care products and services across the globe continues to ride high within its dental business on majorly accretive strategic mergers and integrations. One colossal merger in this field is Poland-based Dental Cremer in 2016.
Also, Henry Schein might gain from several trends in end markets like customer demographics. The increasing number of lives covered, following healthcare reforms in the United States, is likely to boost the company. Additionally, the company gains traction from animal health business on the back of tailwinds in North America as well as overseas markets. The burgeoning demand for animal health products in the United States should further drive the company’s growth.
Key Stocks
A few better-ranked medical stocks are PetMed Express, Inc. PETS, Align Technology, Inc. ALGN and Myriad Genetics, Inc. MYGN, all three sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed has a long-term expected earnings growth rate of 10%. The stock has surged roughly 79.4% in a year.
Align Technologyhas a long-term expected earnings growth rate of 28.9%. The stock has skyrocketed 168.4% over a year.
Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has soared 91.6% in a year.
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