Align Tech cut to Hold at Jefferies after clear aligner survey

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Shares of Align Technology (NASDAQ:ALGN [https://seekingalpha.com/symbol/ALGN]) fell ~5% on Friday after Jefferies downgraded the dental product manufacturer to Hold from Buy, citing results from a U.S. dentist survey that indicated multiple headwinds for the clear aligner maker.

Analyst Michael Sarcone pointed out that the survey conducted in early September involving 49 orthodontists and general dentists suggested that until 2030, there will be “only modest, and underwhelming, incremental clear aligner penetration.”

Additionally, the survey respondents have, on average, expected Align Tech’s (NASDAQ:ALGN [https://seekingalpha.com/symbol/ALGN]) market share to drop to 70% in 2026 from 77% in 2024, with rival AngelAlign being the leading share taker. According to Jefferies, 22% of doctors have also indicated potential demand declines in the near term due to macro-related headwinds.

While Align (NASDAQ:ALGN [https://seekingalpha.com/symbol/ALGN]) tech, trading at a historically low valuation, “seems relatively attractive,” the analyst expects its multiple expansion to come under pressure due to a lack of near-term catalysts and macro headwinds. Sarcone slashed his price target on ALGN to $140 from $215 per share.

MORE ON ALIGN TECHNOLOGY

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* Align Technology, Inc. (ALGN) Presents At Morgan Stanley 23rd Annual Global Healthcare Conference (Transcript) [https://seekingalpha.com/article/4820875-align-technology-inc-algn-presents-at-morgan-stanley-23rd-annual-global-healthcare-conference]
* INCY and ABBV lead S&P 500 healthcare gainers in Q3; MOH and ALGN lag [https://seekingalpha.com/news/4500406-incy-and-abbv-lead-sp-500-healthcare-gainers-in-q3-moh-and-algn-lag]
* Align Technology files ITC complaint against Angelalign over patent-infringing aligners [https://seekingalpha.com/news/4498164-align-technology-files-itc-complaint-against-angelalign-over-patent-infringing-aligners]