UPDATE: Citigroup Reiterates Sell Rating, Raises PT on Zimmer Holdings Following 2Q13 Sales Report

In a report published Monday, Citigroup analyst Matthew J. Dodds reiterated a Sell rating on

, and raised the price target from $69.00 to $77.00. In the report, Citigroup noted, “2Q13 sales were ahead of the Street and our forecasts but a negative mix shift led to the GM arriving 200bp below expectations and EPS a penny low. ZMH raised sales guidance for 2H, but not EPS as the GM pressures look to continue. 2Q sales of $1.17B (+3.8%) were $17MM ahead of the Street. Excluding FX (-160bp) and net acquisitions (-70bp), organic sales growth was 4.8% and closer to 4.0% when adjusted for an extra selling day. Knees (+5% cc) were $9MM better than expected (although partly driven by GelOne and an acquisition) and Hips (+2% cc) were $3MM light. Trauma (+3% cc) was light, Spine (+4% cc) was better, Extremities (+15% cc) was better, Dental (-1% cc) was in line and OSP (+28% cc) was $11MM better and drove the majority of the upside vs. the Street. We estimate ZMH gained 40bp of global market share in Knees and lost 50bp in Hips.” Zimmer Holdings closed on Friday at $82.90.