J.P. Morgan Reiterates a Hold Rating on Henry Schein

By Carrie Williams

In a report released today, Lisa Gill from J.P. Morgan reiterated a Hold rating on Henry Schein (NASDAQ: HSIC), with a price target of $163. The company’s shares opened today at $156.06.

Gill wrote:

“Yesterday morning, HSIC reported 3Q16 EPS of $1.68, which was $0.05 above our estimate and $0.03 above Bloomberg consensus. The company exceeded our operating profit estimate by $2M, while below the line items drove a ~$0.04 tailwind vs. our estimate. For a detailed analysis of the quarter, see our initial take on the results here. HSIC affirmed the FY16 EPS guidance $6.55-$6.60, which represent 10-11% y/y growth, and provided initial FY17 guidance that bracketed expectations and represents 9-11% y/y growth. We were somewhat surprised at the magnitude of the stock reaction yesterday, given that the FY16 guidance was reaffirmed and the initial FY17 outlook was in line with expectations. While HSIC continues to deliver relatively steady earnings growth, we believe valuation remains rich based on EPS growth expectations over the next few years (shares trade at 21.6x our 2017 EPS estimate).”

According to TipRanks.com, Gill is a 4-star analyst with an average return of 9.9% and a 57.1% success rate. Gill covers the Services sector, focusing on stocks such as Walgreens Boots Alliance, The Advisory Board, and AmerisourceBergen.

Currently, the analyst consensus on Henry Schein is Moderate Buy and the average price target is $178, representing a 14.1% upside.

In a report released yesterday, Leerink Swann also reiterated a Hold rating on the stock.

Based on Henry Schein’s latest earnings report from June 30, the company posted quarterly revenue of $2.87B and quarterly net profit of $120.1M. In comparison, last year the company earned revenue of $2.69B and had a net profit of $127.7M.

Based on the recent corporate insider activity of 87 insiders, corporate insider sentiment is negative on the stock. Most recently, in August 2016, Paul Brons, a Director at HSIC sold 3,381 shares for a total of $554,585.

Henry Schein, Inc. engages in the provision of providing health care products and services to medical, dental, and veterinary office-based practitioners. It operates through Healthcare Distribution and Technology and Value-Added Services segments. The Healthcare Distribution segment includes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. The Technology and Value-Added Services segment offers financial services on a non-recourse basis, e-services practice, technology, network and hardware services. The company was founded by Henry Schein and Esther Schein in 1932 and is headquartered in Melville, NY.