Solventum's Self-Help Is Ahead Of Schedule, But Sentiment Is Not
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Stephen Simpson20.51K FollowersFollow5ShareSavePlay(10min)CommentsSummarySolventum offers an interesting risk/reward profile, with improving margins, disciplined reinvestment, and potential revenue growth acceleration offsetting modest core revenue growth concerns.The $725M+ Acera Surgical acquisition provides entry into a double-digit growth wound care market, though it introduces operating and sentiment risks.SOLV's 'Transform for the Future' initiative targets $500M annual cost savings, aiming to boost operating margins above 23% by 2028.I expect 4% long-term revenue growth, high single-digit FCF growth, and see shares as undervalued with potential for rerating on continued execution. MoMo Productions/DigitalVision via Getty Images Looking at Solventum’s (SOLV) performance since my last update, the roughly 10% move in the share price is modestly disappointing relative to the progress the company has made. On the other hand, the broader medical device space is down modestly overThis article was written byStephen Simpson20.51K FollowersFollowStephen Simpson is a freelance financial writer and investor.Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds).Analyst’s Disclosure:I/we have a beneficial long position in the shares of SOLV either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You