Henry Schein’s Stock Struggles Amid Market Rally
Henry Schein, Inc. (HSIC), based in Melville, New York, is a leading provider of health care products and services for dental practitioners, labs, physician practices, and various health care settings. Currently valued at $9.4 billion, the company focuses on supplying dental and medical solutions aimed at enhancing operational efficiency and patient outcomes.
Market Performance Stalls as Large Competitors Thrive
In the past year, shares of Henry Schein have lagged behind the broader market. The stock has only increased by 8.2%, while the S&P 500 Index ($SPX) has surged nearly 31%. In 2024, HSIC’s stock has seen a slight dip, contrasted sharply by the SPX’s impressive 25.2% rise year-to-date (YTD).
ETF Comparison Further Illustrates Underperformance
Zooming in on the health care sector, HSIC’s performance falls short when stacked against the SPDR S&P Health Care Services ETF (XHS), which has climbed about 11.8% over the last year. The ETF has gained 7.4% YTD, further highlighting HSIC’s minor losses during the same period.
Factors Behind the Weak Performance
Some reasons for HSIC’s slow growth include a drop in sales from personal protective equipment, particularly due to falling glove prices. Additionally, the company is still dealing with repercussions from a cyber incident that took place at the end of last year.
Recent Earnings Report and Analyst Outlook
After releasing its third-quarter results on November 5, HSIC’s shares fell more than 4%. The company reported adjusted earnings per share (EPS) of $1.22, exceeding analysts’ expectations of $1.16 but falling short on revenue, which came in at $3.17 billion compared to the forecast of $3.24 billion. For the full year, HSIC anticipates adjusted EPS to range from $4.74 to $4.82.
Looking ahead, analysts project a 6.2% growth in EPS for the current fiscal year ending in December, estimating it at $4.78 on a diluted basis. Historically, HSIC has had a mixed performance: it surpassed earnings estimates in three of the last four quarters, but missed on another occasion.
Analyst Ratings Provide Mixed Signals
Among 13 analysts covering HSIC, the consensus rating is a “Moderate Buy,” supported by five “Strong Buy” recommendations, six “Holds,” one “Moderate Sell,” and one “Strong Sell.” This consensus rating has remained stable over the past three months.
On November 18, Michael Cherny of Leerink Partners reiterated a “Hold” rating on HSIC with a target price of $73. Although HSIC is currently trading slightly above the average price target of $74.67, there’s potential for growth, as the highest target suggests a possible increase of 10.5%.
On the date of publication, Neha Panjwani did not hold positions, either directly or indirectly, in any of the securities mentioned in this article. All information and data are provided solely for informational purposes. Please view the Barchart Disclosure Policy for more information.
The views expressed in this article are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
