On Monday, STAAR Surgical (NASDAQ:STAA) saw its stock rating upgraded from Hold to Buy by a Stifel analyst, who also raised the price target on the shares to $50.00, up from the previous target of $30.00. The upgrade comes after a period of notable pullback in the company's share price, which the analyst believes has factored in the near-to-intermediate-term concerns regarding the U.S. market outlook for the company's EVO product.
The analyst highlighted that the initial coverage of STAAR Surgical with a Hold rating was influenced by mixed feedback from physicians and a tempered outlook for the U.S. market. Since then, investor enthusiasm for EVO's domestic opportunities has waned. Other challenges for the company include slower ICL growth, a pressured refractive market, and looming competition from China.
Despite these headwinds, the analyst sees positive signs, including conservative guidance for 2024 and indications of growth for U.S. EVO, based on recent diligence. These factors, coupled with what the analyst describes as trough valuation and investor sentiment, present an opportunity to invest in STAAR Surgical's differentiated asset and technology at discounted prices.
The report suggests that while there are still uncertainties, particularly regarding long-term U.S. market conviction and STAAR Surgical's ability to compete with Chinese rivals, the current stock valuation makes it an attractive buy. The analyst concluded that STAAR Surgical's stock is more likely to reach $50 before it drops to $25, leading to the upgraded rating and increased price target.
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