Analyst Explains Why They Upgraded Their Rating on Wright Medical Group (WMGI)


In a report released today, Michael Matson from Needham upgraded Wright Medical Group (NASDAQ: WMGI) to Buy, with a price target of $30. The company’s shares closed yesterday at $26.79.

Matson commented:

“WMGI has entered into an agreement to acquire in cash and expects to finance the purchase with the proceeds of the announced $440M equity offering. Cartiva offers its Synthetic Cartilage Implant (SCI) to treat arthritis of the big toe (an estimated $400M US market). WMGI expects 2019 revenue to be $35M (up 50%) and $47M, respectively, and expects Cartiva to add 100 bps to both its 2019 revenue growth and its 2019 adjusted EBITDA margin assuming the deal closes by year-end. And given strong 3Q18 performance to-date, WMGI raised its 2018 revenue guidance. We believe that WMGI shares have declined due mainly to expected dilution from the announced equity offering and view the pullback as a buying opportunity leading us to upgrade WMGI to a Buy.”

According to TipRanks.com, Matson is a 5-star analyst with an average return of 13.2% and a 63.9% success rate. Matson covers the Healthcare sector, focusing on stocks such as Boston Scientific Corp, Cardiovascular Systems, and Zimmer Biomet Holdings.

Wright Medical Group has an analyst consensus of Strong Buy, with a price target consensus of $31.92, representing a 19.1% upside. In a report issued on August 21, Stifel Nicolaus also initiated coverage with a Buy rating on the stock with a $34 price target.

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The company has a one-year high of $29.89 and a one-year low of $19.01. Currently, Wright Medical Group has an average volume of 1.21M.

Based on the recent corporate insider activity of 74 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of WMGI in relation to earlier this year.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

Wright Medical Group NV operates as a global medical device company, which engages in the design, manufacture, and distribution of biologic products. It provides surgical solutions for the foot and ankle market and its products include large joint implants for the hip and knee, extremity implants for the shoulder, elbow, hand, wrist and foot and biologic products, including bone graft substitutes. The company was founded by Frank O. Wright in 1950 and is headquartered in Arlington, TN.

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