Smiths Acquisition Weighs On ICU Medical's Profitability, Shares Fall

  • ICU Medical Inc ICUI reported Q2 sales of $561 million, up 75% Y/Y, due to Smiths Medical's acquisition, and missing the consensus of $566.47 million.
  • Adjusted EPS fell from $1.88 to $1.37, missing the consensus of $1.86.
  • Guidance: ICU Medical forecasts FY22 adjusted EBITDA of $350-$370 million, down from a prior range of $450-$500 million, and adjusted EPS of $6.20 - $6.80, compared to $9.00 - $10.50 expected earlier.
  • Raymond James writes that while legacy ICUI continues to perform well (organic revenue growth was +6% y/y in 2Q), inflationary pressures and sluggish Smiths sales continue to weigh on profitability. 
  • The 2022 guidance came in below estimates, as the Smiths acquisition has become a bigger struggle. 
  • The analyst believes that the commentary around recent trends was encouraging, and the implied 4Q guidance gives some hope that '23 should be better. 
  • The analyst has lowered the price target from $208 to $190 with an Outperform rating unchanged.
  • Price Action: ICUI shares are down 10.7% at $168.07 during the market session on the last check Tuesday.
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