Analyst Says This MedTech Giant Stock Offers 'Too Much Optionality,' Upgrades Rating

Raymond James upgraded Masimo Corporation MASI from Market Perform To Outperform with a price target of $187 and says that no other company in its coverage offers as many paths to incremental value creation.
The analyst writes that the stock setup seems attractive despite the uncomfortable headline P/E multiple.
A vibrant pipeline adds new growth drivers and potential upside to year estimates.
The analyst sees the 2H23 approval/launch of Stork (baby monitor) as a near-term sentiment driver, with hearables/wearables as a potential long-tailed growth opportunity.
The IP suit with Apple Inc AAPL, as well as the activist involvement, add optionality to the stock.
Related: Apple Watch Faces Potential Import Ban As US Judge Rules Against Tech Giant In Patent Infringement Case.
The stock has been a modest outperformer YTD (MASI is +500 bp vs. Med Tech/XHE), but the stock was one of the worst Med Tech performers of 2022 (-50%).
While expecting periodic dislocations along the way, the analyst believes the value creation opportunity is significant.
Price Action: MASI shares are up 3.62% at $166.72 on the last check Wednesday.

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