Market Overview

Morgan Stanley Sees Underappreciated Upside Drivers For Zimmer


In a report published Monday, Morgan Stanley analyst David R. Lewis reiterated an Equal-Weight rating on Zimmer (NYSE: ZMH).

In the report, Morgan Stanley noted, “We see three underappreciated drivers of additional deal accretion. While we model pro forma EPS at $8.84 in 2016 in our base case, there is a path to exceeding $9.30 through less conservative assumptions for interest, debt repayment, and synergies. A 4.0% interest rate (vs. MS 4.5%) could drive $0.18, doubling debt repayment could provide $0.08, and each percent saved from lowering the company's combined cost basis (COGS, SG&A, and R&D) is worth $0.20-0.25 to 2016 EPS. We are most conservative on COGS, where we only model $40mn of savings in 2017 or 1% of total costs. We see an improving risk reward and remain comfortable that remedies exist for any FTC action.”

Zimmer closed on Friday at $103.79.

Latest Ratings for ZMH

Jun 2015DowngradesBuyHold
May 2015MaintainsBuy
May 2015MaintainsOverweight

View More Analyst Ratings for ZMH
View the Latest Analyst Ratings

Posted-In: David R. Lewis Morgan StanleyAnalyst Color Reiteration Analyst Ratings


Related Articles (ZMH)

View Comments and Join the Discussion!

Latest Ratings

TOLGoldman SachsInitiates Coverage On42.0
KBHGoldman SachsInitiates Coverage On36.0
YEXTSunTrust Robinson HumphreyMaintains28.0
LHCGSunTrust Robinson HumphreyMaintains160.0
DLRSunTrust Robinson HumphreyMaintains140.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Morning Market Movers

UPDATE: Deutsche Bank Initiates Coverage On Markit