Stephens cuts Hologic stock target to $70, maintains overweight

On Tuesday, Stephens analyst Mason Carrico revised the price target for Hologic (NASDAQ:HOLX) shares, lowering it to $70 from the previous $77, while continuing to recommend an Overweight rating on the stock. The adjustment follows Hologic’s second fiscal quarter of 2025 performance, which saw the company’s shares decline after reporting results that fell short of expectations. With a current market capitalization of $13.1 billion and trading at $58.81, InvestingPro analysis suggests the stock is currently undervalued, despite 14 analysts recently revising their earnings expectations downward.

Despite a modest revenue exceedance driven by the Skeletal segment, both gross and operating margins did not meet projections, although adjusted earnings per share surpassed estimates by one cent. The company maintains a healthy gross profit margin of 61% and operates with moderate debt levels. Hologic has issued guidance for the third fiscal quarter of 2025, anticipating revenues and adjusted earnings per share to be below the Street’s expectations. InvestingPro subscribers can access 12 additional key insights about Hologic’s financial health, which currently rates as GOOD with an overall score of 2.97.

Looking forward, the company anticipates a return to growth in its breast health segment in the fourth fiscal quarter of 2025. Furthermore, the upcoming Envision product launch in 2026, along with more favorable comparisons, are expected to contribute to the growth of the breast health sector in the next year. In the near term, however, the absence of significant catalysts might result in the stock’s performance remaining within a certain range. The stock’s beta of 0.55 indicates relatively low volatility compared to the market, while its PEG ratio of 0.93 suggests potential value relative to its growth prospects.

Carrico pointed out that the stock is currently trading at approximately 14 times the firm’s estimated earnings per share for fiscal year 2026, suggesting that the market has already factored in the moderated near-term growth. For the stock to experience an upward trajectory, improvements in top-line trends will be essential. The analyst expressed optimism for the potential for such improvements as the year comes to a close.

In summary, while the near-term outlook for Hologic does not present much to be enthusiastic about, Stephens believes that the stock holds more potential for upside than downside over the forthcoming 12 months. This perspective is contingent upon Hologic’s successful execution in its breast health division. The firm has reiterated its Overweight rating on the stock, with a revised price target of $70.

In other recent news, Hologic Inc . reported second-quarter financial results that exceeded expectations, with adjusted earnings per share (EPS) of $1.03, surpassing analyst estimates of $1.02, and revenue reaching $1.01 billion, slightly above the consensus forecast of $1 billion. Despite this performance, Hologic lowered its full-year earnings guidance, now projecting adjusted EPS of $4.15 to $4.25, down from the previous forecast of $4.25 to $4.35. The company maintained its full-year revenue guidance between $4.05 billion and $4.10 billion, though it adjusted its EPS forecast downward due to anticipated reduced revenue from China and tariff impacts. Mizuho Securities responded by lowering Hologic’s stock price target from $75 to $65 while maintaining an Outperform rating, reflecting the updated earnings estimates and ongoing market challenges. Similarly, Jefferies reduced its price target from $78 to $65, maintaining a Hold rating, and noted a 3% decline in growth aligning with market expectations. The company’s Breast Health segment experienced a notable revenue decline, while the diagnostics segment saw a slight increase. Hologic’s third-quarter forecast anticipates adjusted EPS of $1.04 to $1.07 on revenue of $1 billion to $1.01 billion, below analyst estimates. Analysts from both Mizuho and Jefferies highlighted the challenges faced by Hologic, particularly in the Chinese market and due to tariffs, impacting the company’s financial outlook.

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