RBC sees nearly 30% upside for this medical tech stock as headwinds abate
There’s a rosy outlook ahead for Hologic , according to RBC Capital Markets. The bank upgraded shares of the medical technology provider to outperform from sector perform. Analyst Conor McNamara accompanied the move by raising his price target to $87 per share from $72. Shares of Hologic have slipped 6% this year, but McNamara’s revised price forecast implies an upside ahead of 28%. HOLX YTD mountain HOLX YTD chart “Our new price target assumes HOLX returns to historic multiples seen when the company was growing revenue MSD [mid-single digit] and beating / raising,” the analyst wrote. McNamara said he believes that Hologic’s organic revenue growth guidance for fiscal year 2026 will exceed current street estimates. This could in turn boost investor confidence, “leading to a period of multiple expansion.” Two recent M & A deals could also help increase the company’s overall organic growth in fiscal year 2026. “We believe the buyside is discounting HOLX’s recent M & A success and over-penalizing the company for recent 1x headwinds; however, we expect upside surprises in coming quarters will convince investors +MSD growth is sustainable,” the analyst added. “With a clean balance sheet and multiple end-markets, we think there is ample opportunity for HOLX to continue to exploit this M & A strategy in the medium and long term.” McNamara said that two of Hologic’s product platforms could begin adding “meaningful growth” beginning late next year — Panther Fusion and the Genius Digital Diagnostics System. Meantime, various headwinds that plagued Hologic in fiscal year 2025 are also set to abate. For instance, China sales declined significantly in fiscal year 2025, but the company believes that these sales have bottomed out. Hologic also faced a year-over-year decline of around $100 million in breast health equipment sales, but RBC does not anticipate this to reoccur. “We think HOLX has enough wiggle room to offset any other headwinds (i.e. – continued declines in HIV testing in Africa via US policy changes),” McNamara added.
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