Please ensure Javascript is enabled for purposes of website accessibility

Why Owens & Minor Stock Soared More Than 25% Today

By Rich Smith - May 26, 2021 at 1:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The market is cheering the updates that the medical device maker delivered during its Investor Day presentations.

What happened

Shares of medical and surgical equipment manufacturer Owens & Minor (OMI -6.51%) were on a tear Wednesday, rising a solid 25.7% through 1 p.m. EDT in response to updates the company delivered at its 2021 Investor Day event.

So what

So what did Owens & Minor say to get investors so excited? Oh, just that it expects to grow its business from the $8.5 billion in revenue it booked last year to "in excess of $12 billion" by 2026.  

In just five years' time, says management, Owens & Minor will grow its revenue stream by roughly 50%, and produce $6 per share in adjusted earnings. For comparison, normalized earnings for all of last year were $1.42, so the company anticipates transforming 50% sales growth into a four-fold increase in profits.

I can see how investors might find that prospect appealing.

Arrow angles up on a green stock chart

Image source: Getty Images.

Now what

Granted, pie-in-the-sky promises are hardly unheard of on Wall Street, but Owens & Minor also gave investors a nearer-term yardstick by which to measure its progress toward its 2026 goals.

Based on the company's recent "exceptional performance," CEO Edward Pesicka says that as early as 2022, the company should be earning between $3 and $3.50 per share. Not only would that be better than 100% growth from its 2020 numbers, it would be about six times higher than 2019's adjusted earnings, notes the CEO. That would put Owens & Minor on a path toward "doubling our earnings guidance from 2022" by 2026.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Owens & Minor, Inc. Stock Quote
Owens & Minor, Inc.
$31.45 (-6.51%) $-2.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.