Solventum Corporation Set to Announce First-Quarter Earnings on May 8

With a market cap of $11.5 billion, Solventum Corporation (SOLV) is a U.S.-based healthcare company that spun off from 3M on April 1, 2024. Headquartered in Maplewood, Minnesota, Solventum focuses on providing innovative healthcare solutions across various segments.

First-Quarter Results and Analyst Expectations

The company is set to announce its first-quarter results on Thursday, May 8. Analysts predict SOLV will report a non-GAAP profit of $1.19 per share, a decline of 42.8% from $2.08 per share during the same quarter last year. Notably, Solventum has a mixed earnings surprise history; it surpassed Wall Street’s estimates three times in the last four quarters.

Annual Earnings Projections

Looking ahead, Solventum is projected to achieve an adjusted EPS of $5.55 for the current year, representing a 17.2% decline from $6.70 in fiscal 2024. However, analysts anticipate a rebound in 2025, with earnings expected to increase by 8.7% to $6.03 per share.

Stock Performance Analysis

Over the past year, SOLV has risen 6.9%, although this trails the S&P 500 Index’s 9.4% gains. In contrast, it has outperformed the Healthcare Select Sector SPDR Fund’s (XLV) decline of 1.3% during the same period.

Recent Earnings Report and Market Reaction

On February 27, Solventum reported its Q4 results, leading to a 4.4% drop in shares. The company’s revenue grew by 1.9% year-over-year to $2.1 billion, slightly exceeding Wall Street estimates. A 2.3% increase in product sales supported this growth. However, rising costs negatively impacted profitability, pushing gross profit down by 3.4%. Non-GAAP net income also fell 34.1% to $247 million, though earnings per share of $1.41 exceeded analyst expectations by 7.6%.

Outlook Concerns and Analyst Ratings

Investor sentiment weakened as Solventum’s FY2025 outlook did not meet expectations. The company estimates organic sales growth to be between 1% and 2%, with adjusted EPS projected between $5.45 and $5.65, a significant drop from $6.70 in FY24. Additionally, free cash flow is expected to decline sharply from $805 million in FY24 to a range of $450 million to $550 million.

Analysts maintain caution regarding the stock’s future. SOLV is rated as a “Hold” overall by consensus. Out of 10 analysts, one recommends a “Strong Buy,” eight suggest “Hold,” and one advises a “Strong Sell” rating. The average price target stands at $81.14, indicating a potential 22.8% upside from current prices.

On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the disclosure policy here.

The views expressed herein are those of the author and do not necessarily reflect those of the parent company.