RBC Lowers Carl Zeiss Meditec to 'Sector Perform,' Cuts Target

Analyst Adjusts Call Amid Profit Outlook

In a research note on Tuesday, RBC Capital Markets analyst Robert Sanders downgraded Carl Zeiss Meditec to 'Sector Perform' from 'Outperform,' while lowering the price target on the stock to €59 from €65.

Reasoning Behind Downgrade

The analyst cited a more cautious outlook for the company's profitability in the near term as the reason for the downgrade.

Sanders expects Carl Zeiss Meditec's earnings per share to increase by 6% in fiscal 2023, below the previous estimate of 10%. This downward revision reflects concerns about the impact of global economic uncertainty on the company's end markets.

Additionally, the analyst noted that the recent acquisition of Avedro, a maker of corneal implants, could weigh on Carl Zeiss Meditec's margins in the short term.

Despite the downgrade, Sanders remains optimistic about the company's long-term prospects.

He said, "We continue to view Carl Zeiss Meditec as a leading player in the medical technology industry with a strong product portfolio and a solid track record of innovation.

However, we believe that the current market conditions warrant a more cautious stance on the stock in the near term."