On Monday, BofA Securities raised its rating on Integer Holdings (NYSE:ITGR) from Neutral to Buy, also increasing the price target to $135 from $105. The optimism from BofA Securities stems from Integer's potential growth due to the emerging market for pulsed field ablation (PFA) devices used in treating atrial fibrillation.
The firm anticipates that sales of PFA, which ranged between $100 million to $200 million in 2023, will surge to over $2 billion by 2025. Integer Holdings, which supplies key components for PFA devices sold by major healthcare companies, is expected to see significant revenue growth from this market expansion.
BofA Securities projects that new PFA device launches could potentially add up to $90 million to Integer's revenue in 2025, which could increase the company's growth by an additional 200 to 300 basis points. This growth estimate surpasses the 7% revenue growth anticipated by the market, with BofA Securities modeling around 8% for Integer in 2025.
The firm's revised price objective of $135 is based on a 13 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple for the year 2025, which is an increase from the previous multiple of 11.5 times. BofA Securities has noted that Integer's management has expressed a bullish outlook on the PFA opportunity, which could lead to a re-rating of the stock due to faster end market growth.
InvestingPro Insights
In light of BofA Securities' recent upgrade of Integer Holdings (NYSE:ITGR), InvestingPro data and insights offer additional context for investors considering the stock. Integer Holdings is currently trading at a high P/E ratio of 42.51, which indicates a high earnings multiple compared to the market. However, this is somewhat moderated when looking at the adjusted P/E ratio over the last twelve months as of Q4 2023, which stands at 35.27. The company's stock has experienced a significant price uptick, with a 53.34% six-month price total return, and it's trading near its 52-week high, at 97.67% of that value.
InvestingPro Tips suggest that while Integer Holdings does not pay a dividend, the company has been profitable over the last twelve months and analysts predict it will remain profitable this year. Additionally, the firm's liquid assets exceed its short-term obligations, providing a degree of financial stability.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available, offering insights into Integer Holdings' financial health and market performance. To explore these insights and benefit from the full suite of tips, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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