Health Care Equipment & Supplies: Solventum STARS Initiation

On October 14, coverage was initiated for Solventum Corporation (SOLV) with a Hold recommendation and a 12-month target price of $73, based on a P/E of 12.9x the 2025 EPS estimate. Solventum, formed from 3M Company’s health care spin-off on April 1, 2024, has a strong leadership team but faces challenges such as high debt and low margins. Currently, its shares trade at a 40% discount compared to the peer group, which is deemed appropriate given the hurdles it faces.