Maplewood, Minnesota-based Solventum Corporation (SOLV) is a healthcare company specializing in developing, manufacturing, and commercializing solutions to address critical customer and patient needs. With a market cap of $13.2 billion, the company operates through Medsurg, Dental Solutions, Health Information Systems, and Purification and Filtration segments.

Companies worth $10 billion or more are generally described as "large-cap stocks," Solventum fits right into that category, reflecting its significant presence and influence in the healthcare and medical instruments industry.

SOLV currently trades 11.1% below its all-time high of $85.92 touched on Feb. 26. Meanwhile, the stock has soared 15.6% over the past three months, significantly outpacing the Health Care Select Sector SPDR Fund’s (XLV) 4.2% gains during the same time frame.

Solventum has outpaced the healthcare sector over the longer term as well. SOLV has gained 13.4% over the past six months and 10.5% over the 52 weeks, outpacing XLV’s 6.4% decline over the past six months and 2.1% dip over the past year.

To confirm the uptrend, SOLV has traded mostly above its 50-day and 100-day moving averages since mid-January with some fluctuations.

Despite delivering better-than-expected financials, Solventum’s stock prices dropped 4.4% in the trading session after the release of its Q4 results on Feb. 27. Driven by 2.3% year-over-year growth in product sales to $1.6 billion, the company’s overall topline inched up 1.9% to approximately $2.1 billion, surpassing the Street expectations by a small margin. Meanwhile, due to a surge in the cost of sales, the company’s gross profits dropped 3.4% year-over-year to $1.1 billion. Although the company’s non-GAAP net income plunged 34.1% year-over-year to $247 million, it was expected and its EPS of $1.41 surpassed the consensus estimates by 7.6%.

However, the company’s FY25 guidance missed investor expectations. Solventum expects its organic sales to grow by a modest 1% - 2% and its adjusted EPS to range between $5.45 - $5.65, down from $6.70 in FY24. Furthermore, the company expects its free cash flows to drop from $805 million in FY24 to $450 million - $550 million, shattering investor confidence.

On a positive note, SOLV has outpaced its peer Hologic, Inc.’s (HOLX) 23.8% decline over the past six months and a 19.4% drop over the past year.

Nevertheless, analysts remain skeptical about the stock’s prospects. Among the 10 analysts covering the SOLV stock, the consensus rating is a “Hold.” Its mean price target of $81.14 suggests a modest 6.3% upside potential from current price levels.