Jefferies cuts Solventum stock price target to $34 on de-rating

Jefferies has revised its price target for Solventum Corp. (NYSE:SOLV) stock down to $34 from $43, while keeping a Buy rating on the company. Despite trading at a low P/E ratio of 9.3 and a market capitalization of $14.6 billion, Solventum appears undervalued according to InvestingPro analysis. The firm has raised its EBITDA estimates by 7% to 13%, citing factors such as the company's $8.9 billion backlog, project scale, and fixed-price execution that could lead to margin upside.

Jefferies pointed out that recent sector selloffs have disconnected from Solventum's growth trajectory, and peer missteps support the value of their proven teams. The analyst projects a third-quarter 2026 adjusted EBITDA of $152 million, marking a 2.7% increase compared to consensus estimates. Solventum's stock is trading at roughly 8.7 times its 2028 EBITDA estimate, compared to engineering, procurement, and construction peers at around 12.4 times, making it an attractive entry point.

Subscribers to InvestingPro can access 7 additional exclusive tips for SOLV, along with comprehensive Pro Research Reports covering 1,400+ US stocks. Recently, Solventum reported second-quarter earnings that surpassed Wall Street expectations, with adjusted earnings of $2.55 per share, beating the forecast of $1.51. Revenue for the quarter reached $2.2 billion, propelled by strong organic growth, a tariff refund, and advanced orders linked to an ERP cutover.

This performance led Solventum to raise its future outlook. Stifel also maintained a Buy rating on Solventum, now with a price target of $100, and increased its 2027 organic growth estimate for the MedSurg division to 3.4% from 1.6%. However, a SKU rationalization program is anticipated to create a 100 basis point headwind to growth in 2026.