HOLX: Buyout Deal And Neutral Ratings Will Define Shares Through 2026

The analyst price target for Hologic has inched higher by approximately $0.33 to $76.50, as analysts factor in slightly stronger long term growth and margin assumptions while anchoring valuation to the proposed Blackstone and TPG takeout price near $79 per share.

Analyst Commentary

Analyst reaction to the proposed Blackstone and TPG acquisition has been mixed, with most firms converging around price targets in the mid to high $70s and resetting ratings to more neutral stances as upside becomes more constrained by the agreed takeout price.

Bullish Takeaways

Bullish analysts view the up to $79 per share acquisition price, including the CVR structure, as a fair reflection of Hologic's intrinsic value relative to its current growth and margin profile.
Some see the transaction as a solution to public market skepticism, arguing that a private ownership model could better support long term investments in diagnostics and women's health platforms without quarterly earnings pressure.
Price target increases into the mid to high $70s are cited as a signal of confidence that the deal will close near the proposed terms, which in turn is viewed as effectively putting a valuation floor under the stock.
Supportive commentary around the transaction timing and structure is interpreted as a sign of limited perceived regulatory or financing risk. This reinforces deal certainty and underpins risk adjusted valuation.

Bearish Takeaways

Bearish analysts are largely stepping to the sidelines. They argue that with the stock now trading as a deal proxy, the risk reward skew is less compelling given limited upside beyond the agreed purchase price.
Multiple downgrades to Neutral or equivalent ratings reflect concern that Hologic's standalone growth trajectory and commercial execution missteps earlier in the year no longer justify a premium multiple in the public markets.
Some caution that the company operates in relatively lower growth end markets. In their view, this may cap longer term upside even under private ownership and makes the current offer appear closer to a full valuation.
There is also an element of execution risk around closing in the expected 2026 timeframe. Some analysts note that any unexpected delay or renegotiation could pressure the shares from current levels.

What's in the News

Blackstone and TPG have entered a definitive agreement, alongside Abu Dhabi Investment Authority and GIC, to acquire Hologic for $17.2 billion. Shareholders are to receive $76 in cash plus a contingent value right of up to $3 per share, with closing targeted for the first half of 2026 (Key Developments).
Blackstone and TPG are reported to be in advanced talks to acquire Hologic at a price above $75 per share, valuing the company at more than $17 billion including debt. A deal announcement is expected in the near term, though talks could still fall apart (Bloomberg periodical).
Earlier, Blackstone and TPG had revived takeover discussions with Hologic, re-engaging the board and conducting due diligence, which sent Hologic shares up about 8% on the news (Bloomberg periodical).
The U.S. FDA has granted 510(k) clearance and the EU has provided CE marking under IVDR for Hologic’s Panther Fusion Gastrointestinal Bacterial and Expanded Bacterial Assays, expanding its molecular diagnostics menu for infectious gastroenteritis (Key Developments).
Hologic and its Biotheranostics subsidiary will feature 11 new studies on the Breast Cancer Index test at the 2025 San Antonio Breast Cancer Symposium, underscoring ongoing investment in precision oncology and extended endocrine therapy decision support (Key Developments).

Valuation Changes

Fair Value Estimate has risen slightly from approximately $76.17 to $76.50 per share, aligning more closely with the proposed takeout price.
Discount Rate has fallen marginally from about 8.13 percent to 8.06 percent, reflecting a modest reduction in perceived risk.
Revenue Growth has edged higher from roughly 4.95 percent to 4.96 percent, indicating a slightly more optimistic long term topline outlook.
Net Profit Margin has increased modestly from around 20.44 percent to 20.77 percent, suggesting improved expectations for operating leverage and profitability.
Future P/E Multiple has declined slightly from about 22.2 times to 21.4 times, implying a somewhat lower valuation multiple despite the higher fair value estimate.

Innovation in core diagnostic and screening technologies, supported by AI integration, is driving market share gains and expanding margins through premium offerings and product upgrades.
Portfolio expansion, strategic acquisitions, and improved operations are diversifying revenue, supporting resilience, and fueling sustained growth across international markets.
Structural and persistent international, segment, and margin challenges threaten revenue growth, profitability, and earnings momentum without successful execution of higher-margin innovation and market recovery.

Catalysts

About Hologic

Engages in the development, manufacture, and supply of diagnostics products, medical imaging systems, and surgical products for women's health through early detection and treatment worldwide.What are the underlying business or industry changes driving this perspective?

The global rise in preventive women's health and the aging population, combined with growing healthcare expenditure (especially in emerging markets), are positioning Hologic's core businesses for long-term growth. This underlies sustained demand for diagnostic and screening products and should drive higher utilization and recurring revenue.
Continued innovation in 3D mammography and the planned launch of the next-generation Envision system, alongside the integration of AI-driven Genius Detection PRO, position Hologic to capture greater market share, enable premium pricing, and drive margin expansion as older gantries are replaced and product upgrades accelerate.
Expansion of the molecular diagnostics portfolio (notably Panther Fusion assay menu and increased U.S. adoption of new tests for women's health) is broadening the recurring revenue base and supporting steady organic growth, with runway provided by both increased test menu and untested patient populations.
Strategic M&A (notably Endomag and Gynesonics) and accelerated international expansion in surgical and interventional breast health products are increasing revenue diversification and scale, enhancing resilience against U.S. market fluctuations and supporting top-line growth and operating margin improvement.
Operational improvements-including optimized salesforce execution, targeted end-of-life upgrades, and substantial mitigation of supply chain tariff impacts-are restoring growth momentum and efficiency, supporting EPS recovery and stabilizing or improving net margins into fiscal 2026 and beyond.

Hologic Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Hologic's revenue will grow by 5.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 13.8% today to 21.2% in 3 years time.
Analysts expect earnings to reach $992.5 million (and earnings per share of $4.61) by about September 2028, up from $557.1 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $880 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.5x on those 2028 earnings, down from 26.6x today. This future PE is lower than the current PE for the US Medical Equipment industry at 29.7x.
Analysts expect the number of shares outstanding to decline by 1.99% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.77%, as per the Simply Wall St company report.

Hologic Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company is experiencing significant, ongoing headwinds in China due to a challenging operating environment and substantial revenue declines (down over 50% YoY and now less than $10M/quarter versus $60-70M annualized); this creates a risk of sustained weakness in international revenue growth and dampens overall corporate revenue and earnings momentum into fiscal 2026.
Funding cuts to U.S. aid in Africa, notably impacting the HIV diagnostics business, have reduced demand and are expected to persist, representing another structural headwind to international diagnostics revenue and compressing consolidated revenue growth in the first half of fiscal 2026.
Tariffs remain a substantial headwind despite recent mitigation efforts; Hologic expects $10-12M per quarter in ongoing tariff expenses, translating to nearly 100 basis points of gross margin pressure in fiscal 2026, directly impacting net margins and profitability.
The Breast Health segment remains exposed to elongated gantry replacement cycles and declining legacy system revenues, heightening the risks associated with over-dependence on this business line and leaving revenue and earnings vulnerable to slower-than-expected product upgrades or replacement demand.
Gross and operating margin trends are under structural pressure due to product mix shifts (including lower-margin and discontinued products like Fluoroscan), dilutive effects from recent acquisitions, and residual COVID testing declines, putting sustained net margin expansion and long-term earnings growth at risk unless higher-margin innovation and volume growth materialize as planned.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $73.867 for Hologic based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $94.0, and the most bearish reporting a price target of just $65.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.7 billion, earnings will come to $992.5 million, and it would be trading on a PE ratio of 19.5x, assuming you use a discount rate of 7.8%.
Given the current share price of $66.72, the analyst price target of $73.87 is 9.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

HOLX: Downgrades And Buyout Agreement Will Shift Near-Term Share Performance