Zimmer Biomet (NYSE:ZBH) shares rose more than 2% intra-day today after JPMorgan analysts upgraded the stock to Overweight from Neutral, raising the price target to $128 from $125. The upgrade reflected optimism about the company’s potential for valuation improvement as it works to recover from a challenging 2024 performance.
Zimmer Biomet’s current valuation, trading at approximately 11.5–12.0x projected 2026 earnings, reflected lingering concerns around execution following recent supply chain and ERP-related headwinds. Additional uncertainty surrounding 2025 earnings expectations and the sustainability of growth in both the company and the broader orthopedics market further weighed on sentiment.
While the analysts acknowledged that execution risks remained valid and near-term EPS revisions could be limited, they pointed to several factors supporting a more constructive outlook. An improved product portfolio, coupled with steady procedure volumes and reduced pricing pressure, was expected to drive growth in line with Zimmer’s long-range plan (LRP). Moreover, conservative initial 2025 growth estimates of around 4% organic revenue, with the potential to reach 5% by year-end, created room for upside.
With signs of improvement already emerging in 2024 despite ongoing challenges, Zimmer Biomet appears well-positioned for multiple expansion toward the 14.0–15.0x range. While the analysts viewed the stock primarily as a multiple-expansion opportunity in the near term, they noted that strong adoption of new product introductions slated for 2025 could transform the investment case into a multi-year growth story.