What Happened?
Shares of dental and medical products company Henry Schein (NASDAQ: HSIC) fell 2.7% in the afternoon session after the U.S. Commerce Department initiated a national security investigation into medical equipment and devices, raising concerns about potential tariffs.
The probe, conducted under Section 232 of the Trade Expansion Act, examines whether imports of items like syringes, infusion pumps, and surgical instruments pose a national security risk. Such investigations can pave the way for new import duties, creating a significant overhang for the sector. The goal of potential tariffs would be to boost domestic manufacturing by increasing the cost of foreign goods. This development has introduced new uncertainty for the industry, leading to broad-based declines in the stocks of major manufacturers, including Baxter International and GE HealthCare, as investors weigh the potential impact on supply chains and costs.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Henry Schein? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Henry Schein’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock dropped 9.7% on the news that the company reported second-quarter earnings that missed profit expectations and showed a year-over-year decline.
The healthcare products distributor posted an adjusted earnings per share of $1.10, which fell short of analyst forecasts and decreased 10.6% compared to the prior year. While revenues of $3.24 billion slightly beat estimates, investors appeared concerned with the company's shrinking profitability. The results stemmed from softer demand for its dental products in the United States. Furthermore, the company's net income dropped to $86 million from $104 million in the same period last year. Despite the weak quarterly performance, Henry Schein reaffirmed its full-year guidance for 2025.
Henry Schein is down 3.6% since the beginning of the year, and at $66.09 per share, it is trading 19.3% below its 52-week high of $81.91 from February 2025. Investors who bought $1,000 worth of Henry Schein’s shares 5 years ago would now be looking at an investment worth $1,124.
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