Medline Inc. (MDLN.US) saw its share price climb on Monday, closing up 5.43% at $42.72. Wall Street analysts expressed a bullish tone regarding the medical supplier's business model and growth prospects following its $7.2 billion IPO last month. Data shows that a total of 27 institutions have initiated coverage on the stock, with 22 issuing "Buy" or equivalent ratings. The analysts' average 12-month price target is set at $47.12 per share. Analysts pointed to Medline's scale, vertically integrated manufacturing model, and the tailwind from an aging population as its core advantages. On Monday, Medline's stock surged as much as 6.3%, extending its gains since the IPO. Data indicates the company's IPO is the largest of 2025. Following a year of many lukewarm market debuts for new listings, Medline's stock has climbed nearly 40% from its IPO price through January 9th. The company primarily manufactures and distributes products like gloves, surgical gowns, and examination tables used by hospitals and doctors; its market capitalization has now reached $57 billion.
Analysts at investment bank William Blair stated that Medline is a leader in the medical surgical distribution field, with its business covering a total addressable market (TAM) as large as $375 billion, which includes a $175 billion market in the United States. They noted that the company has currently penetrated only about 15% of this market opportunity. William Blair's Brandon Vazquez wrote in a report, "Underpinning this is a multi-decade history of mid-single-digit market growth, which is expected to persist over the next 10 years due to demographic aging." He added that multi-year contracts provide clear visibility into future market share growth. According to U.S. Census Bureau data, the proportion of U.S. residents aged 65 and older is projected to rise from the current approximately 17% to around 23% by 2050.
Medline's strong performance should help dispel doubts previously raised by its lengthy journey to going public. Although the company filed a confidential IPO application as early as the end of 2024, its plans were hindered by tariff uncertainties and a subsequent U.S. government shutdown. Data shows that after its December listing, its stock is on track to outperform U.S. IPO deals that raised $1 billion or more, which have a weighted average return of 16% in their first month.
Some analysts maintain a more cautious stance, citing the impact of tariffs from the Trump administration. Rothschild & Co. Redburn initiated coverage with a $42 price target and a "Neutral" rating, stating that due to tariff-related dilution, they expect margins to remain largely flat between fiscal years 2025 and 2028. The firm said that tariffs introduced by the U.S. government would exert substantial pressure on profit margins, particularly in the second half of fiscal 2025 and throughout 2026. Other institutions believe this impact will dissipate after the short term. Bank of America analysts set a $50 price target, citing Medline's leadership in U.S. medical surgical manufacturing and distribution, and emphasizing that after absorbing tariff-related costs, they project organic growth will reach a long-term mid-to-high single-digit percentage by 2027, with EBITDA also accelerating.
Jalendra Singh, a Senior Equity Research Analyst at Truist Securities, set a $52 price target. He highlighted Medline's manufacturing and distribution network, along with its extensive sourcing and third-party supplier partnerships, which he believes create a self-reinforcing cycle of adoption, retention, and expansion. Singh added that Medline generated over $16 billion in revenue in 2024 from its existing so-called "primary supplier" customers. As these relationships mature, the company has been systematically converting low-margin third-party products into high-margin Medline-branded sales. Management expects the penetration of Medline-branded products to increase from the current approximately 35% to 60%, a shift Singh estimates could unlock roughly $1 billion in additional gross profit.
Comments