Analyst Attributes Two Issues For Owens & Minor's Shares Sell Off

Owens & Minor Inc OMI reduced its FY22 adjusted EPS guidance of $2.50 - $2.60 from the previous guidance of $2.85 - $3.15.
OMI expects adjusted EBITDA of $527-$537 million, compared to the earlier forecast of $570-$610 million.
This revision is owing to the underperformance in the Products & Healthcare segment. OMI noted that this segment was struggling more than anticipated owing to macro headwinds, higher levels of customer inventories, and lower hospital procedure volume.
Credit Suisse says two issues have driven the sharp sell-off:
- First, investors perceived that the company had sounded on track for 3Q when it presented at healthcare conferences in September, making the management and estimate changes seem abrupt.
- Second, there is confusion about whether the estimate revision puts OMI at risk relative to its leverage covenants.
The analyst reduced its EPS estimates for FY22/23/24 to $2.52/$2.25/$2.75 (was $3.00/$3.47/$3.97).
It also reduced the price target from $37 to $20, with a Neutral rating.
Price Action: OMI shares are down 1.82% at $15.09 on the last check Friday.

Momentum6.71

Growth5.64

Quality89.53

Value40.50

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