Baird initiates Haemonetics stock with outperform rating on market position

Baird initiated coverage on Haemonetics (NYSE:HAE) with an Outperform rating and an $87 price target, citing the company's global leadership in plasma collection and its successful portfolio transformation towards higher-growth, higher-margin hospital segments. Despite anticipating near-term organic growth headwinds in FY26 due to a plasma contract expiration, Baird projects normalized high single-digit to low double-digit revenue and EPS growth longer term. This positive outlook is reinforced by Haemonetics' strong financial health, recent Q4 FY25 earnings beat, $150 million share buyback, and FY26 guidance projecting 6-9% organic growth (ex-CSL) and improved operating margins.

Analysis

Baird's initiation of coverage on Haemonetics (HAE) with an Outperform rating and an $87 price target highlights a compelling long-term thesis, despite near-term headwinds. The core of the bull case rests on the company's successful portfolio transformation, shifting from legacy businesses toward higher-growth, higher-margin hospital segments, including VASCADE and Vascular Closure products. This strategic pivot is supported by strong financial health, evidenced by a 19% return on equity, a 57.2% gross profit margin, and a recent $150 million share buyback. While the company's leadership in the $800 million global plasma collection market remains a key asset, the analysis acknowledges a significant challenge in fiscal year 2026: an anticipated plasma contract expiration with CSL. This event is projected to drive a reported revenue decline of 3% to 6%. However, the company's underlying strength is demonstrated by its guidance for 6% to 9% organic growth when excluding the CSL contract impact. Furthermore, Haemonetics projects an improvement in its adjusted operating margin to 26-27% and adjusted EPS between $4.70 and $5.00 for FY26, suggesting effective cost controls and operational efficiency are expected to mitigate the top-line pressure. Baird's long-term forecast for high single-digit to low double-digit growth aligns with this view, suggesting the market may be undervaluing the post-transformation earnings power.

Key Decisions for Investors

• Investors should look beyond the headline FY26 reported revenue decline and focus on the guided 6-9% underlying organic growth (ex-CSL) and expanding adjusted operating margins as key indicators of the core business's health.
• Given the current trading price of $73.40, the new $87 price target from Baird and an existing $100 target from JMP Securities suggest potential upside, making the stock a candidate for accumulation, especially for those with a multi-year investment horizon.
• It is crucial to monitor Haemonetics' execution in its Vascular Closure business revamp and its progress in gaining market share in Plasma and increasing utilization in the Hospital segment to validate the long-term growth narrative.
• The impending contract expiration creates a clear, albeit temporary, headwind, so investors should be prepared for potential volatility in FY26 and weigh the long-term growth story against this short-term disruption.