Morningstar | XRAY Updated Star Rating from 07 Aug 2018
Dentsply Sirona reduced its 2018 outlook below our forecasts, and we anticipate a decrease in our fair value estimate. This quarter's results were dominated by disappointing guidance below our expectations and another massive impairment charge that included $1.1 billion charged to its CAD/CAM and imaging businesses and includes a $69 million impairment to the company’s legacy orthodontics business. Revenue shortfalls and lower-than-expected growth in these segments were the primary cause for the depressed outlook and impairment. Besides our estimate that the company is losing share in the CAD/CAM market, we also note that management mentioned new pressure from mid-tier imaging competitors that have developed more capable systems. This dynamic exemplifies the broad dental industry commodification that we have been highlighting for some time, which is the primary rationale for our no-moat and negative trend ratings on the company. We continue to think the company’s competitive footing will increasingly depend on operational efficiencies paired with aggressive pricing strategies. Overall, the firm's growth and margin expansion opportunities look even more limited than our previous view.Dentsply Sirona’s updated 2018 outlook is weaker than we had previously estimated. The company’s new revenue guidance of $3.95 billion is lower than our prior forecast of roughly $4.2 billion. The company's updated adjusted EPS guidance range is now $2.00-$2.15, falling below our prior $2.58 forecast. While the company has yet to outline any clearly defined plans for resurrecting performance, we think management’s tone during the quarterly earnings call implies an agenda of operational cuts and simplifying R&D, manufacturing, and logistical activities. We expect to hear more details about specific strategic plans at the company’s next investor day, which has been postponed to a yet-to-be-announced date in the fourth quarter of this year.
DENTSPLY SIRONA is a manufacturer of dental products and technologies. The company's Consumables segment is responsible for the design, manufacture, sales and distribution of the company's dental consumable products which include preventive, restorative, endodontic, and dental laboratory products. The company's Technologies and Equipment segment includes responsibility for the design, manufacture, sales and distribution of the company's dental technology and equipment products and healthcare consumable products, including dental implants, computer-aided design/computer-aided manufacturing systems, orthodontic clear aligner products, imaging systems, treatment centers, instruments, and consumable medical device products.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.