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Wells Fargo raised its rating on Masimo (NASDAQ:MASI) to overweight, citing the company’s plans to either spin out or sell its consumer business.
The investment bank said the move will allow Masimo to focus on its core healthcare business. The consumer business will likely contain Masimo’s audio and consumer healthcare products, including the Freedom smart watch and Stork baby monitor, while the core business will include its healthcare and telehealth products.
According to Wells Fargo, Masimo management said it’s aiming to complete the separation “as soon as possible, but stopped short of providing firm timelines.”
Wells Fargo raised its price target for the stock to $160 from $117.
Wolfe Research also raised its price target based on the separation news, to $160 from $145, and valued the consumer business at around $500M, or $10 per share. Wolfe has an outperform rating on the stock.
Stifel, meanwhile, maintained its hold rating on Masimo, but raised it price target to $148 from $115.