Straumann shares slide as UBS warns of growth slowdown after weak Q3 results

Investing.com — Shares of Straumann Group (SIX:STMN) fell after reporting third-quarter earnings that met expectations but raised concerns about future growth, with analysts at UBS citing weak North American performance and signs of a potential fourth-quarter slowdown.

At 9:55 am (0155 GMT), Straumann Group was trading 8.5% lower at CHF 116.6.

The quarterly report revealed that Straumann’s overall revenue matched consensus estimates. However, North American sales fell short by 5% (CHF 163 million versus an expected CHF 171 million), primarily due to sluggish patient flow and a soft orthodontics business. 

This  was a sharp contrast to strong results in EMEA, where revenue surpassed expectations by 3%, driven by double-digit growth in value implant brands, particularly in Germany, Spain, and Italy.

Straumann also saw positive developments in the Asia-Pacific region, with sales exceeding forecasts by 2%. 

However, analysts flagged that these gains were partly boosted by a favorable comparison with the previous year, which had been impacted by China’s value-based pricing reform. 

Latin America similarly posted mixed results, missing revenue targets slightly due to currency headwinds, despite solid organic growth led by markets like Brazil and Colombia.

While management reiterated its guidance of low double-digit organic growth and a core EBIT margin of 27-28% at constant currency, UBS analysts noted that this outlook implies a deceleration in fourth-quarter growth to single digits. 

This has raised concerns about Straumann’s ability to meet the 11% annual organic growth forecast by the market. 

According to UBS, the absence of upward revisions to the company’s guidance, coupled with signs of softness across global markets, will likely weigh on investor sentiment going forward.