Integra LifeSciences downgraded at Citi on recall, lowered guidance

Citi has downgraded Integra LifeSciences (NASDAQ:IART) to sell from neutral citing a large global recall of some of its products and lowered Q2 2023 guidance.
The firm also lowered its price target to $39 from $59 (~23% downside based on Monday's close).
Shares are down ~14% in Tuesday morning trading.
Earlier Tuesday, Integra (IART) said it was voluntarily recalling all products manufactured at a Boston that were distributed between March 1, 2018 and May 22, 2023. The company said that the products could have higher levels of endotoxins than permitted.
As a result of the recall, Integra (IART) will incur an impairment charge of ~$22M related to the write-off of inventories.
In addition, the company is lowering Q2 23 revenue guidance to $372-376M from $396-400M and EPS to $0.55-0.59 from $0.75-0.79.
Also, if the recall continues through 2023, Integra (IART) estimates a revenue impact of $60M and EPS impact of $0.35.
"While the recall is prudent, it is another hurdle and with an uncertain remediation timeline we expect further guidance downgrades," the Citi team wrote.

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