02:54 PM EDT, 06/14/2024 (MT Newswires) -- Patterson (PDCO) faces negative investor sentiment ahead of its fiscal Q4 earnings report due to the recent resignation of the president of dental and persistently weak dental equipment demand, UBS Securities said in an earnings preview emailed Friday.

The investment firm lowered its fiscal Q4 equipment sales expectations due to challenging market conditions and a tough comparison from the previous year when equipment sales grew 19% driven by strong year-end sales incentives and post-COVID-19 trends.

UBS said it expects a difficult quarter for dental equipment and margins, and remains uncertain about management's visibility over the next twelve months.

Animal health sector commentary is mixed, with the potential impact of the recent avian flu outbreak remaining unclear, according to the note.

"We believe a cut to fiscal 2025 is embedded in the stock, so any support for consensus or incremental capital allocation should be well received at the current trough valuation," UBS said.

The company's fiscal Q4 earnings are slated for Tuesday.

UBS reduced the price target on Patterson's stock to $25 from $28 and reiterated its neutral rating.

Price: 22.72, Change: -0.16, Percent Change: -0.68