IDEXX Laboratories Faces Challenges Amid Market Gains
With a market cap of $34.2 billion, IDEXX Laboratories, Inc. (IDXX) specializes in products and services for the companion animal veterinary, livestock, poultry, and dairy sectors, along with offerings for water testing. Based in Westbrook, Maine, the company also markets portable electrolytes and blood gas analyzers for human medical diagnostics.
Stock Underperforms Compared to Broader Market
Over the past year, IDEXX’s shares have struggled, declining 10.4%. In contrast, the S&P 500 Index ($SPX) has risen by 31.3%. Year-to-date, IDXX stock is down 22.8%, while the SPX has gained 25.5%. Additionally, when comparing to the Health Care Select Sector SPDR Fund (XLV), which has achieved a 10.9% increase over the same period, the underperformance is even more notable.
Q3 Earnings Report Leads to Sharp Decline
On October 31, shares fell sharply by 9.8% following a mixed Q3 earnings report. IDEXX reported adjusted earnings of $2.80 per share, surpassing Wall Street’s expectation of $2.69. However, its revenue came in at $975.5 million, which was below the anticipated $979.6 million. The company also revised its full-year 2024 revenue guidance downward, citing slow growth due to broader economic and sector-specific challenges affecting pet owner visits and U.S. veterinary clinic demand. This news further impacted investor sentiment.
Earnings Expectations and Analyst Ratings
For the current fiscal year ending in December, analysts predict a 3.7% increase in IDEXX’s EPS to $10.43. The company’s track record for meeting earnings estimates has been mixed, achieving better-than-expected results in three of the last four quarters.
Among ten analysts reviewing the stock, IDEXX holds a consensus rating of “Moderate Buy,” comprised of five “Strong Buy,” one “Moderate Buy,” and four “Hold” recommendations. This sentiment has softened slightly from three months ago when six analysts favored a “Strong Buy.”
Price Targets Reflect Cautious Optimism
On November 4, Piper Sandler analyst David Westenberg maintained a “Neutral” rating on IDEXX while lowering its price target to $435, suggesting a modest 1.5% upside. The average price target among analysts stands at $494, indicating a potential upside of 15.3% from current levels. Conversely, the highest forecast of $566 points to a substantial 32.1% upside.
On the date of publication, Neharika Jain had no positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
