Analyst Jonathan D. Block from Stifel reiterated a Hold rating on IDEXX Laboratories, Inc. (IDXX), lowering the price target from $525 to $500.
According to Block, IDEXX is gaining market share and experiencing international momentum in various areas. Diagnostic services in veterinary offices are also becoming increasingly important.
However, Block’s survey indicates that vet visit growth is under pressure. Ongoing constraints in practice capacity may hinder volume improvements in the near term. Additionally, further macroeconomic deterioration could exacerbate these challenges.
The analyst predicts that IDEXX’s 2024 CAG Dx recurring organic revenue may reach around +10%.
Despite anticipating IDEXX to have pricing power in 2024, the analyst expects a relatively modest veterinary visit environment.
The analyst believes that the contribution from the new/unknown POC analyzer to IDEXX’s premium will be less than 5% in 2024, below the company’s historical average before COVID-19.
Block states that the new POC analyzer’s recurring consumable will likely have a muted year one contribution, as it takes time for the new offering to establish a base of systems and drive a more significant consumable contribution over time.
Looking ahead, the analyst projects a 2024 price increase of around +5%. If this happens, price may be the biggest contributor to IDEXX’s growth algorithm in 2024.
Block expects veterinary visits to marginally improve in 2024 but attributes labor challenges and recent wellness pullbacks as potential concerns.
Visit growth in 2024 is estimated to be around +1%.
IDXX shares were trading lower by 1.56% at $454.86 on Friday.
