US-China Trade Tensions Pose Risk To Merit Medical's $150 Million Revenue From China

Merit Medical Systems Inc. MMSI is scheduled to release its first quarter 2025 adjusted EPS of 75 cents and sales of $352.82 million, as per data on Benzinga Pro.

Merit develops, manufactures and distributes proprietary medical devices used in interventional, diagnostic and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care and endoscopy.

Barrington Research writes that in 2024, about 41% of Merit Medical’s revenue of $1.36 billion was generated outside of the U.S., and about 11% of Merit Medical’s 2024 revenue was generated in China.

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Analyst Michael Petusky also highlights the company’s several manufacturing and packaging facilities outside of the U.S., including in Mexico, Brazil, Ireland, France, The Netherlands and Singapore — along with U.S.-based manufacturing and packaging in Utah, Texas, Virginia and Minnesota.

Petusky believes most of the products Merit makes in Mexico — its most important international facility — are protected by the USMCA trade agreement, which is still in effect. Thus, the company is shielded from recent U.S. tariffs on Mexican goods.

The analyst maintains the outperform rating and price target of $111.

But the growing trade tensions between the U.S. and China pose a serious risk to Merit’s $150 million revenue from China.

While it seems unlikely that tariffs over 100% will last long between the world’s two biggest economies, if they do, it would significantly affect Merit’s financial outlook for the rest of 2025 and beyond, including its long-term growth plans.

Merit Medical forecasts fiscal year 2025 revenue of $1.47 billion-$1.49 billion versus a consensus of $1.477 billion. The company estimates Adjusted EPS of $3.58-$3.70 versus the consensus of $3.74.

Continued Growth Initiatives covers the 2024-2026 timeframe, and key goals include 5%-7% annual organic revenue growth, $400 million in aggregate free cash flow, and a minimum of 200 bps points of adjusted operating margin improvement to at least 20% by the end of the long-range plan.

MMSI Price Action: Merit Medical Systems stock is up 0.16% at $91.69 at publication Friday.

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