Philips Faces Challenges in China: Neutral Rating Reiterated Amid Revised Guidance
Ryan Adist
Oct 28, 2024, 11:47 AM
Koninklijke Philips N.V. (0LNG – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Julien Ouaddour from Bank of America Securities reiterated a Hold rating on the stock and has a €30.00 price target.
Julien Ouaddour’s rating is based on several factors that have recently affected Koninklijke Philips N.V. The company’s performance in the third quarter of the fiscal year 2024 fell short of expectations, largely due to a significant slowdown in the Chinese market. Sales were down by 3% compared to consensus, and adjusted EBITA also missed forecasts, largely attributed to the challenges faced in China, especially within the Diagnosis & Treatment and Personal Health segments. The situation in China has led Philips to revise its full-year guidance downward, expecting weaker organic growth and adjusted EBITA margins than previously anticipated.
In light of these developments, Ouaddour has reiterated a Neutral rating, indicating that the stock is fairly valued given the current market conditions. While order intake saw some offsetting growth in other regions, the reliance on improvement in China and softer momentum in Connected Care suggest caution. The revised guidance implies a cut to the consensus for the fiscal year 2024, leading the analyst to maintain a Hold rating on the stock, reflecting a balanced view of its prospects and challenges.
According to TipRanks, Ouaddour is a 4-star analyst with an average return of 34.8% and a 76.92% success rate. Ouaddour covers the Healthcare sector, focusing on stocks such as Koninklijke Philips, Smith & Nephew Snats, and Alcon.
In another report released today, J.P. Morgan also maintained a Hold rating on the stock with a €24.70 price target.