12:04 PM EDT, 08/06/2025 (MT Newswires) -- Hologic ( HOLX ) is expected to enter a period of sustainable mid-single-digit, or MSD, revenue growth starting in fiscal year 2026, mostly driven by recent acquisitions and the fading impact of one-time headwinds, RBC Capital Markets said in a note Wednesday.

Analysts, including Conor McNamara, said they expect Hologic's ( HOLX ) guidance for organic revenue growth in fiscal 2026 will be higher than Wall Street expectations of 4.3%. This could help restore investor confidence in the company's ability to deliver consistent MSD revenue growth, potentially leading to an increase in the stock's valuation.

The recent purchases of Gynosconics and Endomag are expected to contribute to growth in 2026, the analysts said, adding that when Hologic ( HOLX ) has previously delivered steady MSD growth, its stock has traded at about 18.4 times next-twelve-months price-to-earnings. However, the stock is currently trading near all-time low P/E levels, likely because investors do not fully trust the current growth estimates.

"We believe the buyside is discounting Hologic's ( HOLX ) recent merger and acquisitions success and over-penalizing the company for recent headwinds; however, we expect upside surprises in coming quarters will convince investors MSD growth is sustainable," the analysts said.

RBC raised price target on Hologic ( HOLX ) to $87 from $72, reflecting an expected improvement in the stock's valuation over the next year. The firm also upgraded the company to outperform from sector perform.

Price: 67.76, Change: -0.06, Percent Change: -0.09